Home › Forums › General › EHTrust/EHT Topics and Creative Real Estate Financing › NEHTrust in CO help qualify buyer for home in TX?
May 8, 2011 at 3:27 am #6770
Talked with a seller today who is moving from Colorado Springs to Dallas and
wants to buy a home currently in foreclosure there. Her concern is the impact of putting her&husband existing home in our program (I explained it is similar to a Lease/Purchase & did not explain it is a Land Trust) may mean they may not be able to qualify for financing for the Dallas home. How respond? My plans are to include an explanation in the email attached to Bill’s Cover Letter/Terms of Proposal/NEO proposal package. BTW, seller’s husband’s company is currently covering the mortgage on the COS property. I did inform the seller that our program may also be used for their buying the Dallas or another home.May 9, 2011 at 12:51 am #33748
I would think the seller’s company paying even a portion of his mortgage on his COS property would look good to the next lender.
I would get a copy of that agreement between his company and the seller.
There is a debt to income letter in our package you should use which you can send to the seller next lender once the property is properly setup in trust.
Between the DTI letter and the letter or docs from the seller’s company I would think you should be good to go.
The DTI letter outlines the NNN agreement in regard to the beneficiary in the land trust and how all expenses are covered by the RB in the property and the lender should credit 100% DTI.
Once the seller sees how well the NARS program works he will certainly wish to work with you in Texas since if you may recall you can not do L/O there legally.
Do you think once he know this and realizes a LT specifically the NARS Trust legally circumvents that restrictive RE law he will wish to use the benefits of the NARS EQuity Holding TRust Transfer once again..??
If I learned one thing from Scott Moyes, it is to not explain the LT let the offer do that for you.
Just let him know the trust is in place to protect all parties etc.
Excellent reply Colin. Yes, the DTI (Debt to Income) Letter typically does the trick. Normally someone who owns one home and is either renting or Seller Carrying their previous home is given between a 60% to 70% DTI Credit, and yes, it may mean they will not be able to qualify if their income isn’t high enough.
I have used the NARS DTI letter very successfully over the years. It instructs the Seller’s, now Borrower’s, new Lender how to treat the trust and net lease. In every case I’ve used it, the Seller’s Lender has given them a 100% DTI, which not only allowed them to get a new loan for their new home, but it actually increased and improved their ability to do so. In one case it resulted in a better loan.May 9, 2011 at 12:42 pm #33750
Wow you even get a better loan in underwriting.!!! cool deal…
In information security we call this an artifact which supports our file or case so if we do get audited by the government we would just pull it up in this case being that convincing DTI letter.
If other investors and realtor/brokers only knew or had a clue of all the tools and resources of the NARS Equity Holding Trust Transfer and how universally you can apply it to most any given RE transaction or scenario it would be a major step forward for them all .. Just IMHO..May 9, 2011 at 5:41 pm #33751
Of course there are no guarantees that the underwriter will give a 100 percent DTI cedit or that it will improve the borrower’s ability etc to acquire better terms, but that has been my personal experience over the years.May 10, 2011 at 3:58 am #33752
I talked to Tom Sunday about the “rent to income” letter.
Time to read the Big Book again to refresh.
I also told Tom about the quick 21 day foreclosure here in Texas as compared to the 4 month Colorado foreclosure.
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