Posted by Sean on April 12, 2000 at 24:48:01:
Here’s my two cents.
If you’re taking back a second you should definitely be getting your price unless you’re charging a decent interest rate. What’s a decent interest rate? I dunno, do you have any debts – like credit cards? Charging 9.5% interest when you are paying 12% on some debts is a losing proposition … unless you think you’re getting a better price by offering to carry a second than by going without.
You seem concerned as to whether he can refinance and pay off your second. I would be concerned too … except isn’t he asking you to carry that second on a different property? Without knowing what other liens exist on that property we can’t know how easy or hard it will be for him to refinance. If it were me, I’d want to know a LOT about that new property that’s being brought into the equation.
As for checking on the status of the first many banks have it set up to where a person can call in and use the automated system to check on the status of their loan. Usually you just need the loan number, the last 4 digits of the person’s social security number and a touch-tone phone. I wouldn’t be shy about asking the borrower to walk me through how that’s done. And I’d call every couple of months to make sure everything was cool.
As for renegotiating the note – why not do that right now? He wants to have you paid off in 12 months and you want that too. Why not just stipulate that if the note isn’t paid off in 12 months the interest rate will increase? That’s far more satisfying, profitable and motivating (imo).
P.S. I’m in Los Angeles myself.