Legal Question in Real Estate Law in Maryland
Buy A House With No Money Down Before Foreclosure
A friend needs to sell her home because of medical problems and has offered to sell it to me. There are a few problems in that one months mortgage must be paid before December 31 or it will go to foreclosure. Is there a way for me to buy her home from her before it goes to foreclosure with no money down. Would rent to own be an option? What kind of agreement do we need to have. Does the lender need to be involved in this? The reason I am asking is that I am on a limited income and depending on the price asked may not qualify for a mortgage and I have no money to put down. We would like to do this transaction between us and yet it still be legal...can anyone help please?
2 Answers from Attorneys
Re: Buy A House With No Money Down Before Foreclosure
You need help with finding a loan that you can qualify for. You also need to look at a host of other matters concerning this transaction such as title to the property, other creditors, and the fair market value of the property. Contact an attorney for assistance.
Re: Buy A House With No Money Down Before Foreclosure
The first thing you must find out is what type of mortgage your friend has--i.e., whether or not it is assumable by a person buying the property. Most conventional mortgages are not assumable, meaning you would have to get your own mortgage and pay your friend's mortgage off in order to buy it. From your question, I assume you would have difficulty doing this. If your friend has a VA or FHA backed mortgage, it may be assumable by you, although the lender would still have to qualify you before you could take it over.
If the mortgage is assumable, your friend and you could make a contract that allows you to buy the house and assume the mortgage, and even agree to pay her something in monthly payments, but that won't stop the foreclosure. The only way to do that is to make arrangements with the lender to pay up the delinquency and get them to withdraw any plans for foreclosure.
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