This is long, but I want to give as much info as possible, so bear with me. Just as an FYI, I will be retaining a lawyer but wanted some opionions and maybe a set of things I should be discussing with him/her.
OK, background: I live in the metro Atlanta area (GA law would apply). I recently refinanced my townhome to lower my payment, remove PMI (house has gone up over 60% in value - woohoo!) and obtain a conventional loan so that I may rent it if I wish.
A co-worker would like to buy it, but will not be able to qualify for a loan at this time. My suggestion: rent for up to 3 years at $800/month and put $100/month of that in escrow for a downpayment for her when she was able to buy.
She talked to a lawyer friend of hers who suggested a Deed of Trust. We would work out an interest rate and loan value. She would put down 5% (to me) and we would file a deed of trust with the court making her the owner of the house. Now, my question is, can I even do that since I have a loan? If possible, it sounds win-win, I don't have to worry about repairs and what not that a landlord worries about, she has more stake in the home, she misses a contracted # of payments and the house comes back to me with all the $$ she's paid me. My main concern though is that she's not protected if *I* don't pay the mortgage and my loan company forecloses - not that I would do that. That possibility is what makes me think that I may not be able to accomplish this - not to mention if she has a 15 yr loan with me and I have a 30 yr loan with my bank and pay the minimum, it's possible for her to have paid me without me paying the bank.
Thoughts? Suggestions?
Thanks!
Athaclena - Real Estate newbie
OK, background: I live in the metro Atlanta area (GA law would apply). I recently refinanced my townhome to lower my payment, remove PMI (house has gone up over 60% in value - woohoo!) and obtain a conventional loan so that I may rent it if I wish.
A co-worker would like to buy it, but will not be able to qualify for a loan at this time. My suggestion: rent for up to 3 years at $800/month and put $100/month of that in escrow for a downpayment for her when she was able to buy.
She talked to a lawyer friend of hers who suggested a Deed of Trust. We would work out an interest rate and loan value. She would put down 5% (to me) and we would file a deed of trust with the court making her the owner of the house. Now, my question is, can I even do that since I have a loan? If possible, it sounds win-win, I don't have to worry about repairs and what not that a landlord worries about, she has more stake in the home, she misses a contracted # of payments and the house comes back to me with all the $$ she's paid me. My main concern though is that she's not protected if *I* don't pay the mortgage and my loan company forecloses - not that I would do that. That possibility is what makes me think that I may not be able to accomplish this - not to mention if she has a 15 yr loan with me and I have a 30 yr loan with my bank and pay the minimum, it's possible for her to have paid me without me paying the bank.
Thoughts? Suggestions?
Thanks!
Athaclena - Real Estate newbie
