Are house mortgages required?

greetings real estate forums reader,

This is an on topic question about mortgages.
In a nutshell. Are mortgages required?

Can one buy a house on income trust alone including downpayment.

thanks for reading.

You mean taking a loan out with the seller instead of a bank?

I do not understand 'income trust"? You can buy house with full cash, if you have all cash.

I was posting hoping to get an answer from info I read on sites such as zillow.
They post information on their sites about monthly payments. A house, a total, a monthly amount posted for readers.
My full question, can you buy a house without a loan? You have a downpayment saved, secured monthly income.
You might make an agreement without a loan, right? Possibly, it might be standard. This is my question.

Thanks jil.

Sure, you can buy a home without a loan if you can pay for it with all cash. Even here, where it is fairly expensive, people do buy with all cash. My understanding is that some of these people do eventually revert to a first mortgage after securing the purchase though. Perhaps the thought or strategy was to get the winning bid by offering all cash. Personally, I could care less as long as the moola is in my bank after 30 days so I would go with the highest bid with the fewest contingencies…

In your original post, you mentioned income trust alone, so are you referring to getting a loan on stated income alone, say if you are self-employed where you are not a reg employee with pay stubs? Good question. I just pinged my mortgage contact, Tracie, and she indicated that she does not do stated income loans at this time. She did say perhaps one or two retail banks such as East West or HSBC may do them (you need to check to confirm though).

Keep in mind that if a loan is involved, the property has to appraise out sufficiently or the loan amount wouldn’t be approved anyway. You may be forced to have to come up with a higher down payment as a result.

Hope that helps some. I am sure others here have their opinions and add-ons…

I think what he is referring to is a contract sale. That is where the seller agrees to finance the purchase after you give him a down payment.

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Well, it is difficult to decipher what exactly is the question. Obviously in a deal like that pretty much anything goes right as long as both parties agreed to it. If an owner is foolish enough to sell to someone on stated income only, well, that is a risk. If I am an owner of a free and clear property, I don’t see the advantage of owner financing a deal. Interest income? Hardly right? I wouldn’t want the headaches potentially. If I am selling, I am selling outright and would want the money in my pocket.

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Sheriff made my point much clearer. Seller financed loan.

Ok, just a suggestion, but make sure your contract/purchasing agreement is sound and protects you fully. I would have someone neutral who is knowledgeable look into the terms of your agreement. Good luck!!!

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To get a seller financed loan offer more than appraised value and a higher interest rate…say 5%. …otherwise the seller has no incentive to sell to you…Seller financing is risky for the seller…If the market crashes and you walk away, the seller could endure a big loss…Seller financing is more attractive to a FSBO seller who is asking more than market price…

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Elt1 response is perfectly right. Very few seller’s will take such a risk at premium price and premium rate. I really doubt such sellers are available in bay area. I have noticed partial seller financing option, but not full seller financing options.

To add to what Jil & Elt1 stated, it is very uncommon to see seller financing in SFH, but more common to see in apartment building. Think of why would seller willing to do it, generally, because they are retiring and wanted to have stable income (better than buying bonds or CD) while maintaining some secure assets.

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What you are really describing is called “rent to own,” and you can do it but it is rare and generally not preferred