I am looking to sell my townhouse on a lease option. I have buyer who is ready to put money down.
I just talked with my loan officer who I normally work with (though I haven’t done a lease option in 4 years) and he tells me that since it is a lease option, the exit strategy for the buyer is NOT a refinance for her.
The mortgage broker says that since she will not be on title, there will be no way to refinance her as per my proposed exit strategy.
What am I missing?
Any help on this would be greatly appreciated! Thank you
I appreciate the knowledge and expertise in this forum and hope to get some great feedback on this deal.
Here are the numbers, please tell me what you think I should do with this property.
I owe $375k Option ARM
amortized monthly payment of $2300 + $600 maintenance fees
Property is slightly over leveraged. I offered it lease option for $377k
I have an interested woman that is asking me to run scenarios if she put $10k and another if she put $20k down.
I was thinking if she put $10k down, her monthly would be $3500 ($2900 rent + $600 maintenance) and having $400/mo go toward the purchase along with the initial $10k
Or, if she puts $20k down $3000/mo ($2400 rent + $600 maintenance) and having $100/mo toward the purchase.
I am totally confused as to what to do for the back end of this now. Maybe I should convert it to a standard owner finance for 2 years, and have her get new financing at that point?
But what is the advantage to her? I should probably put her in a credit repair program of sorts.
What should I do with her option fee? Apply it directly to the principal on my loan and have them reamortize it? Hold it in a savings account in case she defaults?
Any advice is very much appreciated! I AM LOST!!!
You must have misunderstood your Mortgage Broker. The MB could get her a new Mortgage.
Personally I’d take the 20K down(option consideration). Keep some and spend some. Its yours and its non refundable. Herbster
The only one that’s able to get a refinance is you.
Your T/B can’t refinance it because they’re not on title.
They would have to get a new loan.
This is what your broker meant.
Not that they couldn’t get financed, just not refinanced.