I have a house that I owe about $100K on. I have a buyer who is interested in having me owner finance the property. She has done some research and is concerned because of the (no assumption clause) that occurs in mortgages. I have purchased properties in the past subject to and from my experience as long as the mortgage is being paid (which I told her I would be happy to provide proof of this on a monthly basis) there is never an issue. However, with this clause in my mortgage, I obviously can’t 100% guarantee anything. How do I go about making her comfortable with doing this? Also, what is a typical interest rate for an owner finance deal?
BTW, the property is located in Maryland.
Get written permission from the lender and do a wrap. For a very good credit buyer, 2% above the going rate, higher as the credit gets worse. My 2 cents anyway. Herbster
Thanks for your 2 cents. Is it common for the lender to give permission to do a wrap?
Your buyer’s fear is you not paying the underlying lien. It’s best to use a 3rd party processing compnay that will pay the mortgage for you and handle all of the end of year reporting. Don’t forget to do a 1-3 month reserve on taxes and insurance.