Written By: Dan Moralez, First Place Bank, MortgageCurrentcy.com Staff Writer
Given today’s housing market, buyers and sellers are looking for more creative options when it comes to buying and selling a home. One option that is gaining favor with many buyers/sellers is trading properties. Websites such as OnlineHouseTrading.com have popped up in an attempt to help buyers and sellers come together. A recent USA Today article shows that this creative concept has momentum!
As home trading gains steam in the market place, it is a good idea to understand how a house trade works when it comes to the world of mortgage finance. Like most transactions, it involves a buyer with a home to sell. You will typically have a purchase agreement for the home being sold as well as the home being purchased.
Even though the properties are being traded, they are still two separate transactions. You will have a closing for each of the properties and likely a mortgage for each of the properties. In cases where a trade is involved, it is best for both parties to work with one lender and one title company. This will help to insure a smooth and easy closing for everyone involved. Not too mention, two clients are better than one.
Depending on whether the loan is going to be sold to Freddie or Fannie will drive what the documentation requirements are. Here are some general rules to follow:
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