Financing in 07046>Question Details

Murray Rober…, Real Estate Pro in Parsippany, NJ

If I can get a seller to hold a second mortgage in order to facilitate his sale, what might be a fair interest rate and term to keep the lender happy?

Asked by Murray Robertson, Parsippany, NJ Tue Dec 7, 2010

I understand that the buyer and seller will have their own preferances, I'm interested in the primary lenders posiiton, which seems to vary from "not happening" to "long enough for the new owner to enjoy some appreciation and refinance"

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how long do you think they will have to wait for some "appreciation" based upon current market conditions? Do you think the buyer might be overpaying for the home if secondary financing is required? Do you think they may be putting themselves in a position where they may lose the home at some point in the future if there is not an upward move in the market? Why don't the buyers look at something more affordable for them. Lots of questions arise when people are taking seconds in this market.
0 votes Thank Flag Link Wed Feb 2, 2011
The second loan will need to have a minimum due date of 5 years to be acceptable to lenders. The payments may be interest only or amortized but at the least interest payments must be made. No differed interest balloon payments. Check with the lender for the maximum combined loan to value (CLTV) allowed, some where less than 95% depending on the program and lender. You should not have a problem finding a lender that will accept the 2nd on an 80/10/10 or 80/15/5. Good luck
0 votes Thank Flag Link Tue Dec 7, 2010
Murray,

Under which loan program... sorry, but unless we had a specific scenario of the borrower, there are two many programs and scenarios to talk about. Sure, if I had the weekend to answer this question, but not right now. Way to many variables without having some specifics...

thanks,
jeff
0 votes Thank Flag Link Tue Dec 7, 2010
I know it's a bold question, I'm looking for opinions, that's why I asked the question. And I understand that most lenders wouldn't consider this kind of financing. I'm interested in finding out which lenders might finance such a deal and what kind of terms we might be looking at.
0 votes Thank Flag Link Tue Dec 7, 2010
Murray,

You need to check with that particular lender and see what they will allow first, as the 2nd lien. Each program has it's limit and many lenders have overlays. This is a bold question to ask just anyone. In all honesty, who cares about the rate right now, when the focus should be, will the primary lender allow it and at what CLTV.

Thanks,
jeff
Area Manager
jbelonger@ihmci.com
(609) 440-5133
0 votes Thank Flag Link Tue Dec 7, 2010
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