What are our optionsif we’re buying a house via rent to ownbut the owner has borrowed on the house and now owes more than we do?

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What are our optionsif we’re buying a house via rent to ownbut the owner has borrowed on the house and now owes more than we do?

No papers were signed. We were buying for $60,000. We paid $4,000 down. 8.7% interest. We pay the taxes. Our note was increased every time the insurance went up and we paid. Any and all repairs to the house where out of our pocket. We repaired the house after Katrina while waiting for the insurance money. One year after Katrina, supposedly the mortgage company seized the insurance money and applied it to the mortgage. We were told that it would be applied to ours as well. Insurances was part of the house note. Now we pay it separately without reduction in note. We owe $13,000. He owes $48,000.

Asked on June 28, 2011 under Real Estate Law, Louisiana

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Your question and facts surrounding it is a bit confusing. You state that you have a lease with an option to purchase a home from the owner, but the home seems to be in the landlord's name and not yours and you have no papers for the deal but you have some note, presumably a promissory note.

If you have a lease option to buy this home, you need to have the deal spelled out in writing regarding terms, purchase price, application of how much rent if any goes to the purchse price, payment of property taxes, repairs, when escrow to transfer title from the landlord to you is to happen, and if there is going to be an escrow company to handle the sale. 

I do not understand who you owe money to on the "note" referenced and why you would be owing $13,000 to anyone. Did you actually buy the home assuming an existing loan and agree to pay the owner $13,000 on a second loan on the property.

If you could answer my questions and clarify your answer a bit more, I would be more than willing to help you further. Thank you.


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