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Replies:
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| | moseskjp
  |  "Re(6):Assumable loan...what to do"
, Mon 19 Feb 14:00 
It seems to be that the best thing to do with a non-qual. assumable is just to take it "subject to" as usual. This way you save at least a few hundred dollars in fees (I know it's cheap, but it's still not free). Then, if the lender ever contacts you for any reason (why would they?), just assume it then - into a trust if you like.
At least this makes sense to me.
I've got two old non-qual. assumables I'm working on right now. I'm going to go ahead & assume one of them (b/c the seller isn't very open to creativity but there's still a HECK-of-a-lot of equity in this one!).
The other's going to be subject to, etc. as described above. She wants $12,000 of her equity. At first, I thought, "NO WAY, JOSE!". Then, just for the heck of it, I asked, "Would you consider taking it in the form of a second with a balloon in a few years?" She said that was cool with her. Yipee for me!
My PITI first will be $427/mo.
My 2nd with her will be ~$100/mo with w/2 or 3 year balloon.
Comps on the same street are about $60,000
Loan only has 14 years left on it & current balance of about $33,000.
Woohoo!
...jp
"SW.SW.SW.SW."
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| | moseskjp
| "Re(8):Assumable loan...what to do" , Tue 20 Feb 12:26
Well, I make a habit of browsing the RE section of the Sunday classified's every week. I was just looking through them & saw an ad for a non. qual. assum. advertising $12k equity. It was listed in a section that I know is a decent area (near UofM) so I gave them a call.
Turned out that the owner lived out of state & was tired of being a long-distance landlord (CA is a loooong way from TN!). There was also more like $29,000 in equity when you look at the comps (her mom had placed the ad & mistakenly advertised $12k).
With regard to negotiation, she decided on her own as we were talking that she could live with only getting $12k equity since that's what her mom had advertised - but definitely didn't want to just "give" all of her equity away.
I knew that I didn't have $12k to give her up front, so I asked her if she would be willing to take a second for it. She didn't know what that meant, so I had to explain it to her. After enlightening her, she simply said, "Well, I guess that could work for me" Woohoo!
I guess we did figure on price before I laid out the terms I needed. As I presented my offer, I first laid out for her that I was going to take responsibility for all repairs & laid them all out (even though I will only do a small portion of them - I wanted some leverage). Then, I told her that I could give her the full price she had discussed with me before but "...this is what it's going to need to look like in order to work for me..." (proceeded to describe terms)
I think I really sold her on it when I laid out the unexpectedly large payoff she would get in 3 years with the balloon on the $12k second (total of about $15.5k in the end).
Hope that answers your question. If not, let me know & I'll take another stab.
...jp
"SW.SW.SW.SW."
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