Cash Out Mortgage Loans

[Anonymous]

We own a house out right.  Is it unlikely that a bank will give a loan to a buyer due to the fact they will have to pay out cash rather than have a loan transferred to them?  (I'm not sure if I asked that right, hope it makes sense)

[Anonymous]

You are talking about a cash out mortgage.  this can be done of course, but I think it depends upon your credit, income, and the equity in the hosue verse what you want to withdrawl.

[Anonymous]

I will not be taking out a loan on the house.  We want to sell the house, so the buyer would need the loan to buy the house.  However, due to our current economy I am curious if banks can afford cash out loans.  The loan would be approved for the buyer, and the bank would have to pay us cash.  Is it unlikely that a buyer could get a loan for our house since the bank would have to pay out cash?

[Anonymous]

I do not understand.  If a buyer buys your house, the lender that gives him the loan does not care if they are wiring the money to you or to another bank that "owns" the house.  No, they will not give you a suitcase of money, but they will have no problem wiring the oney to an account of your choosing as long as the person who is ont he title of the house being purchased is a signer on the bank account you want the money sent to.

[Anonymous]

Loan transfers do not always involve a cash transfer.  A mortgage on a home should be a debt transfer, not a cash transfer.

[Anonymous]

There is no transfer of "debt".  The bank that is financing the purchase wires cash to the escrow account who then in turn uses that cash to pay off all items set up in the escrow account (including the original home loan).  the loan balance is not transfered to another person, it is paid off with money from the new lender when the new buyer takes on an entirely new loan.  In either case, the buyers bank will have absolutely no problem wiring the money to escrow who will in-turn wire it to the account that you designate.  The only issue would be if you needed the money to go to someone else's account (i.e you did not have a bank account).  I don't think they can do that. 

To simplify, there should be no problem for you to sell the house to someone based upon the fact that you do not have a loan currently on the house as long as:

There are no liens on the house that are not taken care of in the process

The house appraises for the amount you and the buyer agree to sell it for

The buyer gets approveed for the financing

You have a valid bank account in the name of the person who is on the deed of the property you are selling.

Message Edited by mickie08 on 03-30-2009 08:08 PM

[Anonymous]

To answer your last post, just becuase one party is getting rid of a debt and the second party is taking on a debt does not mean that one party is transfering the debt to the other party in a legal meaning.