How Financing Details Affect your Offer
Seller Financing
Another occasional request is to have the seller "carry back" a second mortgage to help facilitate your purchase of their home. In cases when the seller does not need all the proceeds from their sale in order to purchase their next home, this is an option. The advantage to the buyer is that by combining your down payment and the second mortgage from the seller, you may be able to avoid paying mortgage insurance and save yourself some money.
If such a carry-back is part of your offer, you should
include the terms you wish to pay on such as a second
mortgage. Keep in mind that your first trust deed lender
needs to know this information so they can underwrite
your loan, and they have certain minimum requirements.
The minimum term of the second mortgage can be five
years. The minimum payment can be "interest only." Longer
mortgage terms and payments that also include principle
are also acceptable.
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