Posted by Mike Oldfield on May 09, 1999 at 19:48:16:
One of my favorite no down techniques works great with locally owned banks. These banks do not sell their mortgages on the secondary market to a mortgage backed securites pool so they can be what is called “non-conforming”
Borrow 70% of purchase price from the bank and have the seller take back a second for the balance. I ALWAYS disclose my intentions to the bank and they dont care as long as they have what they want which is 1st position. I have found the attitudes of local banks totally different than huge holding compnay banks… I dont waste my time with any banks but locals. Naturally this strategy typically requres good credit.
This may not work in a red hot market because the owner does not need to finance to move the property. Many want to however for the interest income or capital gains concerns. Size 'em up and sell 'em hard. Also the seller will get 70% in cash. This beats the heck out of waiting for another offer (unless red hot)
If you have not owned a home in the last two years you can use the FHA 203b owner occupied program for first time buyers with only 3% down. Many closing costs can also be financed.