Re: CASH BACK AT CLOSING-TRUE or FALSE - Posted by Jeff
Posted by Jeff on March 07, 2001 at 09:46:47:
I’m a mortgage broker. Have been for 20 years. I’d love to tell you that we have lenders who will base your loan amount on the higher of the sales price or appraised value, and let you put money in your pocket at closing, but it’s just not so.
Also, what is described above, as having an addendum to the contract with a “credit for repairs” is very very possibly a violation of the terms of the mortgage, if the seller “credited” any cash back to the buyer after closing. Which is just a nice way of saying the seller gave money to the buyer after the closing.
I hope your mortgage broker knew about this arrangement, and included a copy of this “addendum” to the lender when submitting for loan approval.
If the mortgage broker withheld this info from the lender, then the mortgage broker isn’t doing the buyer any favors and in fact is helping the buyer commit fraud.
If I have misread the terms of the deal, please enlighten me, and I’ll change my opinion accordingly.
Long story short, traditional financing isn’t the way to go if you want cash back up front.
The post that mentions keeping the property for a year, then refinancing, assuming a higher value, is accurate. It is possible to pull cash out under this sceneriaro, if the property has appreciated in value, or if you got a great deal on the front end.