How does taking over a mortgage work?

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mortgage ques_IHB

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I'm buying my house from my brother, but I don't know ANYTHING about mortgage and financing. I do not have good credit so in ADDITION to paying the monthly house payments and yearly insurance and taxes to him, I've paid almost $17,000.00 with the agreement that when I've paid $20,000.00 we will go to the bank with that information and use it as a down payment on a loan for me to take over the remainder of the mortgage payments. I'm only $3,000.00 away from this goal and would like to know the steps to go about this.
 
<p>As a real estate broker I have seen people do some really dumb things as to title, money exchange, and trying to justify how they "bought" a home from a relative or friend.</p>

<p>When they try to list to sell it can get very interesting as to who the actual owner is , who has the legal right to list and/or sell, and who gets the funds and tax burden.</p>

<p>Would you believe that sometimes they aren't honest with the real estate agent or new buyer?</p>

<p>It is best to keep it legal and simple.</p>

<p>Regards</p>

<p> </p>

<p> </p>
 
Hmm... MQ, I know you don't know ANYTHING about bridges, but I have a barely used one in the New York Metro Area that I would like to sell you for CHEAP.



j/k. Anyway, I don't know how your brother talked you into this, but I hope you know what you're doing has no legal basis and will not get you title on that house.
 
<p>You need to get a contract IMMEDIATELY with your relative. The contract should at the least grant an extention to closing until you can qualify. But you've already given him all that money!</p>

<p>Wrap mtges violate the due on sale clause.</p>

<p>The bank will almost certainly not approve your assumption.</p>

<p>Is there equity in the property? After your downpayment.</p>

<p>Generally verbal agreements are not enforceable in the sale of property (called the Statute of Frauds, generally.). Hire a California atty.</p>

<p>If you do this, be aware that the lender can foreclose any time is wants to. This went up the the Supreme Court in the 80s and the Supreme Court said foreclosure was allowed even if the payments are current.</p>

<p>that said, I have had clients in Fla who have taken over the payments and never foreclosed. But they knew what they were doing. For you, It seems to me you are jumping out of the frying pan into the fire.</p>

<p>Do you even know if the present loan is current?</p>
 
<p>MQ, </p>

<p> You must trust your family alot. I unfortuantley want everything in writing. I have seen how ugly things can get and how ugly people can get when it comes to money. A contact can take you a LONG way, but it is still not an iroclad agreement. </p>

<p>No more payments until you get a contract, save your money and of course be willing to accept (in some form) that you might have to walk away and get nothing in return. NO CASH only check or some other traceable form or money transaction.</p>

<p>good luck</p>

<p>-bix</p>
 
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