I have a ‘handshake’ contract on a home in Indianapolis for $52000. I also have a Retail buyer for the home that I can re-assign contract to for $57000. I have not done this before and would like to secure financing for the retail buyer before I stick my neck out and formalize the purchase agreement with seller.
What I know of the buyer is that she has very limited credit and from what she tells me, no bad credit. I dont beleive she has but 1 or 2 tradelines of credit (utility, cellphone). She also tells me that her mother in-law in Califronia will cosign loan if necessary - and she has bough a house witin the past year.
Two things -
Any suggestions for the process to help it go easier for me?
Recommended financing for the retail buyer?
a lender will look for tradelines yes usually 2 -3 open for than 12 months for example credit cards, car payments, anything they have to make instalment payments on over time. some lenders will take a look at alternatives trade lines like phone bills etc. I suggest you get in contact with a mortgage broker so he can pull her credit and start the loan process asap and also get that contract in writting.
If her mother-in-law is going to co-sign (aka "co-borrower’), make sure her FICO score qualifies as well. Prime lenders take the lower of the two mid scores (take her and her mother-in-law’s mid FICO scores, and go with the lower one), and sub-prime lenders take the primary wage earner’s mid score. Also, if her mother-in-law lives in CA and she is going to be on the loan, you need to find a lender that will perform a “non-owner” co-borrower loan but with an owner-occupied rate.