Update- Bank drops out at closing

ownerbuilder-2008June 12, 2010

Well here we go again.

The buyer (50 year old something boyfriend and girlfriend) had been approved for a loan and we signed papers for closing then he and his girlfriend were called just before closing saying that the bank was backing out because they had three other mortgages.

Now the girlfriend has been approved at another bank to buy the house and the acres it sits on and the boyfriend is buying the adjoining acres. Apparently the bank did not want to do a loan on a house with large acreage. We agreed to finance the boyfriends deal with 20% down for one year on a land contract.

Just waiting on the appraisal. Odd way to get it done but nowadays you have to do what ya have to do to get a house sold.

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brickeyee

" Odd way to get it done but nowadays you have to do what ya have to do to get a house sold."

The first issue is that you are not just selling ahouse, buut acreage.

Mortgages that wrap a house and acreage together are not easily sold into the secondary market.
The common fix is to package the house and a limited acreage (often to comply with any zoning) as one mortgage, and the rest of the acreage as a separate mortgage.

The land mortgage is higher risk and will be harder to place and likely have a higher interest rate.

    Bookmark   June 13, 2010 at 9:45AM
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