Options for Selling: Mortgage Payment Assignment Sale
Many homeowners find themselves in a situation where they need to get out from under the burden of their mortgage, and quick. If they still owe near, or even slightly more, than the house is worth, the question they are asking themselves is, “How do I do this if I have little or no money to put in?”
A Mortgage Payment Assignment Sale May Be the Answer
As long as the amount owed is not too much more than the value of the house (within 20-30%), a Mortgage Payment Assignment Sale may be the answer. This option assigns ownership and payments to another individual. For a seller with tons of equity in the house, this option may not be the most advantageous, but when the value of the house is lower than money still owed, they could sell the home for above market value.
Mortgage Payment Assignment Sale Example:
Your house has been appraised at $110,000, but the existing loan balance is $120,000. You, the owner, by transferring mortgage payments over to another person, the buyer, would essentially sell your house for $120,000. If you were to list the house and sell it for $110,000, you would still owe $10,000 more than you sold the house for, and you would be responsible for the listing and closing fees, which are typically 5-10% of the sale price.
So What is the Catch with Mortgage Payment Assignment Sale?
The biggest catch is that Mortgage Payment Assignment requires that your name stay on the loan until the buyer: re-sells the property, refinances the loan or pays off the loan entirely. The seller has the option to put a time limit on this though, requiring that the buyer refinance or re-sell within a given number of years. There are also ways that the buyer is protected, or can add further protection, from this factor. For instance, the buyer can make sure to receive notices regarding payments.
So… What are the Biggest Advantages to Mortgage Payment Assignment?
- The property is sold at a premium sale price.
- A Mortgage Payment Assignment Sale is a quick solution. Many buyers are looking for these specific kinds of deals, and are ready to buy now.
- Most of the closing costs are paid by the buyer, so the seller doesn’t need a lot of money to close a Mortgage Payment Assignment Sale.
This post brought to you by All-Star Investment Properties
All-Star Investment Properties, LLC is led by Shannon McCord, a seasoned investor with 16 years of experience in the industry.
We have homes for sale all over the Birmingham, AL area. We specialize in high cap rate rental houses and high equity rental properties. If you have been searching for how to invest in and purchase property in Birmingham, look no further. We work with various investment properties including wholesale, rehab and retail property. Investing in real estate is our specialty and each time we purchase a property we have you, the end investor in mind. We know all about home prices in Birmingham, AL and have many years of experience in income property. When it comes to property buying, you can count on us! We are your one- stop real estate investment company in Birmingham! Invest in rental property with us today!