Land Contracts

[Minnymouth]

Yes you can buy a home immediately after bankrutpcy....
One option is a "land contract" with the owner until your can refinance with a mortgage company.

Just be sure that you have the land contract recorded at the courthouse..... that makes it as binding as any mortgage...

This is how I bought my home back the same day as the auction....

[Jenny]

A Land Contract is not at all like an actual mortgage. With a land contract, you, as the buyer, do not get the deed or title to the property. It stays with the owner. If the owner has a mortgage, a land contract is usually a violation of that loan.

A land contract is basically renting or leasing with an option to buy. There's really no protection for you as the "purchaser". Obviously you can't take out any equity loans since you don't own the property.

If you buy on land contract, make sure you get a good attorney and set up a rock solid agreement. If an intermediary isn't used, there's no way to know if the owner is making the mortgage payments, and if they don't, you lose all the money you've paid. And of course make sure the title is clear of any liens.

Even though I don't know a lot about your situation, I'm really surprised you'd recommend this to people and even more surprised that you entered into this type of agreement after all the trouble you went through the first time you bought the house.

[SinkingFast]

Actually Land Contracts, or Contract for Deed, aren't viewed by the Courts the way they used to be.

Borrowers aren't afforded the same protections as a traditional mortgage provides. If you miss a payment, the Owner could take the property back. That's true. But, if you make a good faith attempt to explain your circumstance and have a reasonable plan to make up the arrears, a Judge will generally side with the Borrower these days.

Also, in the past, Owners would evict borrowers immediately after a missed payment to reap financial gain benefits. Courts have ruled that this is not fair to the borrower. A Borrower can be entitled to get back their down payment money, the costs of any upgrades or improvements they made to the property while they occupied it, and maybe even a share of the market value appreciation as well. There are established legal presidences for all of these things. Buyers have gotten back their downpayment, monies invested in improvements, and shared in the market value appreciation in Court decisions.

Used to be the Owners held all the cards when negotiating a Contract for Deed or a Land Contract. Not so anymore.

Jenny is right. Be sure to have an attny examine any Contract for Deed or Land Contract you are considering for purchase of property. Be very careful that the terms are completely and thoroughly detailed as to who gets what in the event the Contract is not fulfilled.

But this can be a viable alternative to traditional financing for post BK persons. You can get into a home that you like, with no money out of pocket for downpayment. A set percentage, up to 100%, of each month's payments goes toward purchasing the home. This allows you to gradually pay in on your downpayment until such time as you can seek traditional financing post BK.

[Minnymouth]

Yes, I agree on having the document drawn up by an attorney (cover all your bases)......
Be sure that the document is also recorded at the court house to secure your document and interest in the property.... This insures that the lien holder CANNOT SELL or DO ANYTHING with the property without your approval also as long as the account is in good standing.
This also insures that the lien holder has to follow the same foreclosure process that anyother lien holder has to follow by law.
Do not stay under a land contract any longer than you have too. Usually refinance as soon as possible for a lower interest rate.

This option is sometimes available right after bankruptcy but should be entered into wisely and as a temporary situation.

Land contracts now are recognized by the Courts and can be just as binding as any mortgage to both parties.

Just make sure all liens are perfected, you have a clear title, and all paperwork is done correctly.

Land contracts should only be entered into if you know exactly what your are doing, and have no other options available at the time.

Do not enter into a land contract if you do not have "in writing" all the pros and cons. Know what your doing...........

I would not have purchased my home back at the auction this way had I another option to use, but I did not.... The land contract gave me the option of keeping my home or loosing it. So I entered a temporary land contract till I can refinance shortly.... and yes, I know what I'm doing.... BUT I DO AGREE..... make sure an attorney looks over the documents and do file them at the court house....