I bought a duplex a year ago with a land contract and 5k down to the seller,the deal was as follows :
45K sale price
5K down and 10K paid in 2yrs (15K total to the seller )
30K mortgage balance
pay off for both the seller and mortgage to happen within 2yrs.
Property cash flows in a way that i’m able to pay a little extra to the mortgage and pay a couple of hundreds to the seller every month.
Land contract was recorded.
Now my question goes as follows :
How will i be able to refinance this property when the title is under sellers name?..Would i have to get new mortgage instead??
Taxes were paid based on the 45K purchase price when the land contract took place. Will i have to pay taxes again ??
I called a couple of local institutions and they just deal with owner ocupied…Should i go with the same institution holding mortgage now .If so how should i approach.
The best way to know what an institution will do is to ask them. Just be upfront & honest with what you want to do and you should be fine. I’ve always thought that as long as you have an equitable interest in the property, you also have control of it. If that’s the case, I think you can just refi and pay off the existing debts on the property. I’m sure the vets can help you better. I’m curious to know how it turns out. Good luck.
Could you give is a little more detail on what taxes you paid “based on the 45K purchase price”. Are you referring to the rental depreciation basis? If so, then refinancing the property into your own name ahs no effect upon your depreciation schedules, or your cost basis.
In today’s mortgage climate, it is getting harder to refinance an investment property. It is not quite so difficult, however, to finance the purchase of an investment property. If your lender will only do a purchase money loan, they may treat your land contract as a purchase contract with your seller to buy the property at $45K with $15K down, $30K balance to be financed.
Talk to the lenders about getting a purchase money mortgage in your situation instead of a refinance.
I thought about going directly with the bank holding the mortgage but don’t really want to trigger a bomb without first knowing my evacuation route.
When we closed the deal i paid taxes on the property ( sales tax ) as if it was a sale.
This line i could not understand “If your lender will only do a purchase money loan, they may treat your land contract as a purchase contract with your seller to buy the property at $45K with $15K down, $30K balance to be financed.” do you mind explaining .Seller to buy??? or you meant Buyer to buy???
A land contract is a sale. The IRS will treat it as an installment sale. I have never heard of sales taxes on real estate. Could you mean property taxes? If so, property taxes are based on the assessed value of the property at the time of the sale. Your actual purchase price usually has no bearing on the assessed value until the property is reassessed.
You probably paid property taxes prorated from the date of the sale.
This line i could not understand "If your lender will only do a purchase money loan, they may treat your land contract as a purchase contract with your seller to buy the property at $45K with $15K down, $30K balance to be financed." do you mind explaining .Seller to buy??? or you meant Buyer to buy???
If I had said,
“a purchase contract you have with your seller to buy his property at $45K…”