Posted by Raphael on January 12, 2004 at 09:13:39:
Hello,
Could someone help me analyze this deal.
I am interested in a property listed for $299K. I want to pay the full listing price. But this is how I want to pay for this property. I want to make this offer to seller. So tell me what you think about this offer, and the deal generally. Here goes:
I will offer seller the following deal:
- I’ll get a First Mortagage for $60K
(payable to Seller at Closing)
- Seller to hold a Second Mortagage for the 239K balance
5% interest on this 2nd Mortgage
10 year term
Interest only payments for those 10 years
The full balance (239K) due after 10 years
The 5% interest payments equal $11,950. per year
So the monthly payment on this 2nd will be $995.83
This means I’d pay $119,500 on interest for the 10 years
In addition I’ll pay back the $239K at the end of 10yrs
So altogether the 2nd Mortagge will cost me…
$119,500. + 239K = $358,500,(if I pay it off in 10 yrs).
What do you experts think about this ? What am i missing ?
Raphael