No money down ? - Posted by sis_gurl

Posted by GL - ON on July 17, 2003 at 16:18:57:

Creative, fraudulent - you say potatoe, I say potahto.

Obviously if you tell them and they don’t care it’s not fraudulent.

I was just warning the questioner in case he didn’t know about this.

No money down ? - Posted by sis_gurl

Posted by sis_gurl on July 16, 2003 at 17:50:45:

Property is appraised at 105,000.
Seller wants 75,000.
Monthly cash flow for the duplex is 1,500.

I’m flat broke and all the banks say I need 5-10% down.
The seller left a message on my answering machine and said he can do a 2nd or a defered maintanence credit and get me in no money down.

Can somebody please explain this to me? I’m not familiar with any of these terms or tactics. I’ve been playing phone tag with the seller all day trying to get him to explain and I still have not got in touch with him.

Thank you,
Shelly

Re: No money down ? - Posted by GL - ON

Posted by GL - ON on July 16, 2003 at 20:16:26:

The seller is talking about “giving” you the down payment.

One way is for him to take a second mortgage. This is a piece of paper with “mortgage” on it, representing money you owe him. You make payments on it and eventually pay him back.

The other way is for him to give you a “rebate” for needed repairs. So you give him the down payment check and he hands it back to you as a “rebate”.

Both these tactics were once fairly common but banks tend to frown at them now. So you have to keep them secret from the bank.

Re: No money down ? - Posted by Arthur

Posted by Arthur on July 16, 2003 at 18:26:25:

I’m no pro, but it sounds to me like you would be buying the property from him/her, and then they would give you the 5-10% as payment for maintenance agreed between you.

So, if you buy the property for $100k, the bank will lend you $90k, and the buyer will give you $10k for maintenance work needed, which gives you the $100k needed to satisfy the bank. This of course means the seller only gets $90k, but he may just inflate the price slightly, so if he wanted $100k, he would sell it to you for $111k, and then give you the $11k which would be your deposit.

Hope i made sense there.

Thats how i see it, but like i said, i’m no pro.

Re: No money down ? - Posted by Shawn J. Dostie

Posted by Shawn J. Dostie on July 17, 2003 at 15:45:29:

Now, Now, isn’t that fraudulent to hide from the lender? Thankfully, my local bank doesn’t have that problem.

Good Luck,
Shawn(OH)