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Tricky1549 · Apr 2, 2007, 07:40 AM

Hello all, I have a two family in Jersey City and own it free and clear. I would like to if anyone know's the advantages or disadvantages of holding a mortgage. Thank You

Fr_Chuck · Apr 2, 2007, 08:03 AM

Advantage, you get all the interest money ( which you pay tax on of course). And if they don't pay you get to foreclose and re-sell the same house again.

disadvantage, you don't get any large sum of money up front, if you don't get a large enough down payment it is possible in a few years, the new owners could default on the home, leave it in a total mess and you have to spend large sums of money fixing it back up.

If the new owners don't keep homeowners insurance on the property, and there would be a fire, they will most likely default, maybe go bankrupt on the money and you would be out of everything

I am sure there are more, just what pops into my mind as one who buys and sells houses from time to time

ScottGem · Apr 2, 2007, 08:05 AM

A mortgage is a loan. To hold a mortgage means you are loaning someone money to purchase the property. The disadvantages are the risk you take of defaulting. The advantage is usually only that you can sell it to someone who may not have enough down payment.

Is that what you wanted or are you considered taking out a mortgage on the property?

Tricky1549 · Apr 2, 2007, 08:48 AM

Thank you , it helps but I only consider it if I received a down payment of 25 to30 % and if there is a way to force them to keep insurance, like any mortgage co. would.

ScottGem · Apr 2, 2007, 08:53 AM

You could write it into the contract that they have to maintain insurance. You could also write it in that they have to send tax and insurance payments along with their monthly payments and you will pay the taxes and insurance.

But why would you want to service a loan like this? Doesn't make a lot of sense.

Tricky1549 · Apr 2, 2007, 08:56 AM

Thank You

findnsellnotes · Apr 8, 2009, 04:13 PM

This is a way of selling your home these days when banks are not lending. If you find yourself going through with this and want to sell your note that you hold I may be of assistance for you. Yes you right in wanting a large down payment and having concerns about all the things that could go wrong. I work with a group of buyers that look for these notes that have been made and the holder finding that they want to get out for any reason. Most of the time it just that the note holder want a lump sum of money. However keep my email address just in case. [email protected]. Hope the best for you.