What are the legal issues surrounding someone wanting to pay someone for their house on monthly payments?
Ed Y asked:
This guy offered to purchase my mom’s house but wanted to pay her in monthly installments instead of the usual mortgage. Can someone explain the legal issues associated with this. It’s a very bad idea but can someone tell me why?
This guy offered to purchase my mom’s house but wanted to pay her in monthly installments instead of the usual mortgage. Can someone explain the legal issues associated with this. It’s a very bad idea but can someone tell me why?
The person probably can’t get a mortgage because of his poor credit. If she sells the house this way, she should protect herself by using a real estate attorney to write up the contract and handle the closing.
Ed your mother really needs legal advise on this one. I wouldn’t begin to tell you the what if’s that can happen. But what is proposed gives me cause for concern. Please go with your mom to a real estate attorney and seek advise. Most will do a consult for free.
Well, this person has poor credit and cant get a mortgage.
In all cases, you need a real estate attorney.
And with a solid, binding contract…. if this guy stops paying, you can foreclose on him, but that still is costly, and he could destroy the house.
Unless he has a HUGE down payment… I would run away from this situation. You mom does not want to have to deal with crap 5 years from now if he stops paying….
If she does this make sure a real estate attorney is helping her.
She is essentially going to be his bank, with all of the same risks a bank has.
I personally would not do this, other then the risk I want my money NOW, not in bits for 30 years.