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Buying or Selling a Home/Lease to own a Foreclosure

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Expert: - 4/14/2009


Question
My fiance, his mother, and I, need to get out of the place we are renting and his mother wants to buy a house.  She has perfect credit, but only SS for income and will only look at houses priced 70K or lower. I'm graduating in May and will have a full time job after.  My fiance is on a temp layoff, but we don't know when he will be called back.  We have no down-payment, and right now, virtually no income. We recently came by an offer to consider of a foreclosure and the bank is willing to rent for 3 years to buy. The price will be 113K at that time, but we will be able to afford it then. My question is, should we consider this fully? Or is it possible for his mother to get approved for a loan based on her perfect credit and having a relative permanently living with her providing the income?

Advice is appreciated.  Thanks!!

Answer
This all boils down to just one thing and that is what a bank will or won't do. This is different for every bank. Since you have no job now and your fiance has no job now, no bank will lend on what might be.  Even when you get a job you probably will have little credit history.  If your mother-in-law has minimal income, she may not qualify by herself for a loan on a home large enough for you all.  All parties contributing money to a loan must have their names on the loan.  That being said, you still should go to more than one bank or mortgage lender and talk to them.  It is important for you to learn about the lending process for your future and learn what you can do to improve your credit rating.  A rent to buy might be a good situation for you now, but make sure you know how much of your rent is going to apply towards your purchase of this property and that it is stated in the contract.  This is something that you should discuss with an attorney.  If I can help in the future please let me know.

Buying or Selling a Home

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Sharon Huneycutt, Realtor, Associate Broker, GRI, e-PRO

Expertise

A lot of people who want to move to the mountains don't really realize what it might involve. For instance, here in North Georgia, if you want a mountain view, you may have to drive up very steep roads. Will you have well water (That's usually good!)? Do you speak septic tanks? Have you considered that if you want really want to get away from it all, you'll do it on a gravel road? What's difference between a Log home and a Log Sided home? How can I tell? Who takes care of the house when you're not there? Where can you stay to check it out? This is a very popular area for second homes and investment properties or when you finally decide to get way from it all, I can find your perfect property. I can answer questions on North Georgia Mountain living, housing, land, amenities, and activities. We handle a lot of foreclosed properties in our office so I have become a Certified REO Specialist. REO means Real Estate Owned and is the industry name for a Foreclosure. It refers to "owned by a bank or other corporate entity". If it involves an area of expertise I don't have, I can probably tell you what kind of an expert you do need.

Experience

We've had property in the Ellijay area for over 10 years. My husband, who is a Civil Engineer and Appraiser, and I built our own log home. We researched log homes and North Georgia for three years before choosing Ellijay. Because of the building experience and being married to an engineer/appraiser, my real estate experience is a bit more extensive than average. I also am an education freak believing that the more you know, the better off you are. My husband and I both like photography, so we drive and hike all over the mountains looking for pictures.

Education/Credentials
MHA, CMA, Licensed Realtor, Associate Broker, e-PRO, GRI, Certified REO Specialist. Realtors are required to have 24 hours of continuing education every 4 years. In the last three years, I have 180 hours so far!

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