Posted by Lorne on July 13, 2003 at 15:31:42:
It CAN help if it allows you to qualify for a loan and reduce the amount of money you have to come up with at closing.
For example, you may qualify for one program that provides 80% LTV, which means you have to come up with 20% at closing. There MAY be another program that provides the sam 80% LTV, but allows the seller to carry back 15% and you only have to bring 5% to closing.
If you have a ton of cash at your disposal, you won’t need it. If you are like me, you try to minimize the amount of money you have in up front on your deal, so you have cash available for your next deal. It’s one more way to creatively structure the financing of an acquisition.
A word of advice, though. It is a good idea to talk with a GOOD mortgage broker about the deal before you are offering this to the seller. You may frustrate them and yourself if your original offer doesn’t meet the criteria of any loan program.