Pending Divorce Can Be A Deal Killer; Rent Backs; Delayed Financing

Here a few quick reminders:

Pending Divorces can be deal killers. This is b/c underwriters need to know what the final obligations will be for both spouses before they can issue a loan approval. If a divorce is pending with no finalized and recorded divorce decree, underwriters have no way of knowing what a spouse’s future obligations will be with certainty and will therefore be unable to issue a loan-approval – even if the borrowers are very strong in every other way.

Rent Backs for 59 days. Buyers using “owner occupied” financing to buy a property must move into the property within 60 days, in most cases. To ensure that buyers are in the property on “day 60,” we remind agents to limit “seller-rent-backs” (where sellers rent back the house they are selling) to 59 days.

Delayed Financing – Tax Considerations.  I blogged about “Delayed Financing” a few weeks ago. It is where buyers pay cash for a property and then borrow against that same property within 180 days of close of escrow. I was reminded by a reader, however, that the delayed financing needs to close within 90 days of the original purchase if the buyers want the new debt to be considered “acquisition indebtedness” for tax purposes. Readers can email me if they’d like more details.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 310167

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