Looking at financing... - Posted by BOB-CA

Posted by Dan (NY) on January 25, 1999 at 19:55:23:

I have another question. If I understand this thing correctly you are going to go out and get a new first mortage and leave the existing second mortage hanging out there. I don’t know any banks that would go for that. If I were the seller I wouldn’t go for that!

This seems like a whole lot of effort for not much return. If you love this house so much why not buy it with a 97% FHA mortage at 7% with a 6% seller rebate, you could probably negotiate a much better price with the seller if they didn’t have to hold a second mortage.

Good Luck!

Looking at financing… - Posted by BOB-CA

Posted by BOB-CA on January 25, 1999 at 19:30:56:

Here’s a deal I’ve negotiated:

Single Family home

Purchase price: 114,900
Existing loan 35,820
down payment: 15,000
Seller financing: 64,080 @ 6.5% for 5 yrs, interest only

My actions:

First mortg: 50,820 (9% for 30yrs)
Pay off existing loan 35,820
Pay off down payment 15,000

I have a renter that will rent for 1250/mo.


Gross Income: 15,000
less expenses: 3,450
less 1st mortg: 4,906.92
less 2nd int. 4,165.20

Profit: 1277.88/yr.

My QUESTION: How do I refinance this thing at the end of five years in order to pay off the 2nd mortgage owed: 64,080. I am concerned about the high loan to value ratio already on this property, meaning I may not be able to pull the cash to pay this mortgage off from this house. Any info is appreciated.