Well one thing I could do is get the current mortgage holder to allow the conversion and move the lien to the condo still owned by the original owner of the 2 family.
They are keeping one of the units as their home. Currently they have 2 mortgages totaling more than the value of the remaining condo that they own. However if they payoff the Home Equity Line of Credit the proceeds from the sale of the other side of the house they are making a condo, then the existing first mortgage is less than 75% of the value of the condo they are continuing to live in. Confused yet?
So if I can get the existing lien holder to allow the change in property type and transfer the lien to just one of the units instead of the whole building, that might be a solution. There are, however, complications. First off, the mortgage is being serviced by a different company that the original lender, so that means dealing with 2 entities on the issue.
Also a change a property type effectively puts the mortgage in default and the lender could call in the whole note forcing the payment of the entire mortgage, which is a significant amount of money. More than the sale.
Showing posts with label condo conversion. Show all posts
Showing posts with label condo conversion. Show all posts
Monday, March 26, 2007
Thursday, March 22, 2007
2 units converted to condos in Nantucket
Here's an interesting deal.
A client of mine bought a side by side duplex last year on Nantucket Island where he lives and works. It was a great rental property. Now he has changed the property type to 2 condos and sold one of them for $510,000.
That's less than he owes in total against the house, but the appraisal on the other half, which includes a separate studio/ workshop (meaning, no heat) is $750,000.
Here's the deal. Refinance the half that he still owns keeping the mortgage high enough that he can pocket most of the proceeds from the sale, while paying off the first mortgage (5/1 Interest Only) and the Home Equity Line of Credit against the whole property.
It gets trickier...the borrower's credit score has dropped from 698 to 648 in the last few months.
As a Mortgage Broker who works with investors, this is exactly the kind of deal that turns me on and lights me up.
I'll blog the solution as soon as it's approved, don't want to jinx it.
A client of mine bought a side by side duplex last year on Nantucket Island where he lives and works. It was a great rental property. Now he has changed the property type to 2 condos and sold one of them for $510,000.
That's less than he owes in total against the house, but the appraisal on the other half, which includes a separate studio/ workshop (meaning, no heat) is $750,000.
Here's the deal. Refinance the half that he still owns keeping the mortgage high enough that he can pocket most of the proceeds from the sale, while paying off the first mortgage (5/1 Interest Only) and the Home Equity Line of Credit against the whole property.
It gets trickier...the borrower's credit score has dropped from 698 to 648 in the last few months.
As a Mortgage Broker who works with investors, this is exactly the kind of deal that turns me on and lights me up.
I'll blog the solution as soon as it's approved, don't want to jinx it.
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