Her father was planning on giving us an early wedding present of $50k for a down payment on a house. I used to have amazing credit but a previous relationship I was in tanked it to sub 600. The past year I’ve been working crazy hard in fixing it and now I’m in the high 600s. We did a pre approval application just to see what we’d get and we ended getting an FHA $300k at 7.25% so we started moving forward with seriously looking for a place. We’re looking for mostly undeveloped land in central NC, USA where we can put a modular Clayton Homes house.Yesterday we looked at a parcel that we are going to put an offer on that’s 2.88 acres with beautiful mature trees and 1 acre has already been cleared so we wouldn’t have to do any additional clearing. On town water/sewer so no well or septic needed. Land is being sold privately without a realtor. This coming week we bring the construction manager w/ Clayton out there so he can make sure he doesn’t see any red flags. And then their people do lean searches and zoning confirmations.Thursday we called her father to talk about how he’s going to get us the down payment and he gave us some news. He said he’s been thinking about it and instead of a down payment he’s just going to buy the whole house with cash. We’d then pay him a monthly payment. Essentially he’s acting as the bank, offering a 30yr mortgage and charging us market average interest (6-7%) and there will be legally binding contracts and documents to protect us and him. Monday he’s going to talk to his lawyer and make sure he’s able to liquidate enough of his stuff to move the money around and so the lawyer can start drafting up all the documents.The only stipulation is that until the house is paid off, we aren’t allowed to sell the property without his consent. The interest we’ll be giving him (along with his other properties) will be his income so if we abruptly sold he’d be out that income. Also worth noting, he is in his 80s and in non-optimal health so the chances of him living another 30 years is very slim. Once he dies she gets all of his assets which means we own the house regardless of how much we still “owe” at that point.So… are we missing anything here? Seems like a no-brainer but I just want to make sure we won’t be getting screwed or screwing him.
Majeed Ekbal's Daily Blog 