Seller afraid L/P won't allow for them to get new mortgage on another home

General Real Estate Investing
1

What response do you use when a seller fears that they will not be able to get a new mortgage if they sell their home to you on a L/O or P/O? I have heard that a bank will give 75% of the value of the monthly payments they have coming in towards their debt-to-income ratios in order to qualify them for their new mortgage.

I have also heard about a document that allows the seller to receive 100% on the monthly payments.

Could someone explain this or offer some direction?

Thank you in advance.

2

Howdy Opendoor:

The best way would be a straight sale with a mortgage payment going to the seller if they owner finance some of their equity in a wrap around mortgage. 100% of the payment less their payment to the bank or mortgage company would be counted as income for them.

You are correct that most lenders take 25% of the rent off for maintenance, vacancy and other expenses. If this hurts the sellers ratios then you may need to do a sale.