Hello all. I have an opportunity to purchase a house from my friend’s cousin for the current amount owed on the loan. She currently has ARM finincing, and is about to lose the house because her mortgage is about to jump. Anyway, I would really like to help her out, and would like to make this as painless as possible for the both of us. So, I was just wondering if there was anyone out there that could give me a generic process for going about this, i.e. necessary steps (appraisal, title check, etc.) and also the necessary forms involved. As for a purchase agreement, is it legal to use forms published by my local real estate commission, or are these only for licensed real estate persons?
Thanks,
Parallon
Parallon - First of all you can use whatever forms you and the seller are comfortable with. Heck you can write it up on a napkin (but i wouldn’t advise it).
You are buying it for the amount owed, but you didn’t provide details. Are you planning to leave the existing mortgage in place and you want to take over payments? If so you should find out if it is assumable, many ARM’s are. In that case you’d go through a formal assumption process with the current servicer. If that is the case, open up escrow with a title company, contact the servicer and get the paperwork going.
If you want to buy “subject to” the existing mortgage without formally assuming it you could handle the paperwork yourself or go through title. Just be aware that if the servicer catches wind of the transfer they may threaten acceleration of the debt.