borrowing against mortgage - Posted by JohnBoy


#1

Posted by John Behle on December 14, 1998 at 17:49:00:

Yes, you can borrow against it, but a bank is probably not the best source. Most do not understand or loan against paper. They don’t know the time value of money and if the banker has an HP12C on his desk, it is a paper weight.

The simplest approach - and probably cheapest - is to take your payor in to get a new loan. We have great success just offering to pay their closing costs. That way they get rid of the balloon and lowere their rate at the same time.

A private investor might loan against the note (depending how the feel about contract for deed in your state), but the payor can usually be enticed with the closing costs or a small discount.

If the LTV ratios won’t cut it, do a “partial payoff/partial subordination” with them. Have them payoff most of the note, get a new first and you subordinate what is left to a second.


#2

borrowing against mortgage - Posted by JohnBoy

Posted by JohnBoy on December 14, 1998 at 08:55:07:

I here people talk about borrowing against paper or borrowing funds to purchase paper.

If you presently held a mortgage on a property and sold that property by creating a new mortgage between you and the new buyer at 10.5% ammortized over 30 years with a 5 year balloon, would a bank loan you money against that mortgage at a good rate allowing you to pay off the underlying loans you already have on the property?

Would a bank do the same if you had the property sold to someone on a contract for deed? Basically refinance the current mortgage for a better rate and term?