Mortgage issue

[exohexoh]

Sauk Village, Illinois

We are looking to owner finance a home (for $105,000 at 6.5% interest). The seller told us that we would we be paying him each month and that he would take out a mortgage on the house and then apply our payments to his mortgage.

We've recently learned that this is perfectly normal. However, we are concerned about our protection should something go awry on his end. If he misses a payment, gets sued, dies, etc., being that the house would stay in his name until we were able to refinance ourselves, would we be in jeopardy of losing the home and all of the money we put into it?

[FarmerJ]

The only way to do a contract for deed where you make payments to a owner instead of a bank is to have it done by your attorney so this way you are protected and the contract is recorded. This CD could be sold to another party ( investor) and the seller would be able to have cash to be out from it , him taking a mortgage out on it is not a wise choice because it seems to me the only way he could get away with that is if your contract were not recorded at the county govt center. Use the links up top and find a real estate atty from your area to consult with about the cost of having a contract for deed drawn up by her/him and arranging for a title search. amongst the things you need to do , also confirm with the city/county if there are any work orders against the home, learn if there is any code compliance issues like say a septic system that is failing or a mandated city water hook up. or even any up coming changes that will cost you money because of the change being mandated by local govt.

[nextwife]

Don't do an owner finance unless the house is free and clear, you've used an attorney AND you obtain a land contract (or had the seller take back a mortgage) that is properly executed and recorded. In addition to all the other due diligence one should do.