Land Contract Question

[seejung]

We have paid 64K on a 125K land contract in Michigan. A baloon is due in 6 months for the balance of 61K. My husband lost his job and it is likely we will not have enough money to make the balloon payment. If we do not make that balloon payment as agreed, do we lose the 64K we already paid on the contract?

You need to pull out the contract and see what it says. Most likely it says that you will lose that money. You have some time to find another job and have an income coming in, then you can refinance the property. With that kind of equity in the property, you shouldn't have any problems getting a new loan to pay off the old one. If that doesn't work, find someone to refinance it for you and make them a partner. You have to be making the payments though. Or move in with a relative and rent it out to get it refinanced. The banks will see it as an investment vs a liability. Talk to some local experts to verify this.

[Brittany1130]

If you really can't make the 61k on your own, ask some friends to borrow you the amount so that you have the property and then take out a loan on that property and pay back your friends. That sounds better from my point of view.