Posted by Michael Morrongiello on February 13, 2001 at 17:32:43:
Just because the owner is willing to carry back a portion of your sales price in the form of a smaller subordinate 2nd lien does not absolve you from putting at risk a cash down payment on your behalf.
Given your credit scores, It very well may be feasible to obtain 100% financing on this rental investment home purchase, however it all likelihood, the lender if they make such a loan will charge you an “off market” interest rate and want to limit their exposure to somewhere around 80% - 85%.
If you have the cash to put down, (like 5% or more), then it might make sense to see how motivated and flexible this seller really is?
You can ask them to carry back (2) two mortgages and notes. An 80% LTV 1st lien, along with a smaller 10% -15% +/- 2nd lien. The 1st lien can then be converted into CASH through the owner SELLING it at the time of closing.
To your success,