seller financing do lenders see this? - Posted by jorge

Posted by Sean on September 11, 2003 at 02:39:47:

if thats the case with the score… i would negotiate the price better and get conventional financing. the deal u suggested is for investors whose score is 580 and lower

seller financing 50%…how do lenders see this? - Posted by jorge

Posted by jorge on September 10, 2003 at 20:11:30:

Ok… I have a sellers agent call me and tell me that his client has a 230k home for sale that he owns free and clear…with the exception of a bridge loan that he got to buy his next property…he didn’t tell me how much that loan was for… (I know. I should have asked.) Anyways, what I was thinking of offering is full price and have him carry a 50% 2nd at say 4% (assuming that is enough to pay off his bridge loan) and then get a loan for 50% from a mortgage person. I shouldn’t have a problem getting a lender to give me a 50% ltv loan even though the CLTV will be 100%…
By the way this is going to be in Denver and its going to be owner occupied… since I am moving out there next week.
And Would like to get into this without any of my own money.
The realtor seems to think that he has a pretty motivated seller here.
so any suggestions here would be appreciated…

THank you,


Re: seller financing 50%…? - Posted by Brent_IL

Posted by Brent_IL on September 10, 2003 at 21:42:29:

When you play the what-if game, it’s best if your opponent is the seller. In this case, you are the only one playing. You must talk with the seller. Until you find out what he owes, you have no idea of what is in the realm of acceptable offers. Did he borrow $225K? A quick way to find out is to make an offer to purchase. If it isn’t accepted, ask for a counter-offer.

If you want to go to a regular mortgage lender, you’ll need to use a substitution-of-collateral clause in the purchase contract and then quietly invoke it in escrow before you apply for a 50% loan. Perhaps, your mortgage broker can direct you to lenders that will allow the seller to subordinate. Either way, you should try to move the seller’s PMM off of the property.

Re: how do lenders see this? - Posted by Sean

Posted by Sean on September 10, 2003 at 21:15:23:

depending on how your credit looks (if its bad) you will have to go with a sub prime lender and get slammed on the rate. Most lenders that i have come across take in to account the CLTV as if it were the LTV.

Re: how do lenders see this? - Posted by Jorge

Posted by Jorge on September 11, 2003 at 01:46:18:

Well I just got my TU score from TU the other day and it said it was 721. In january when I had them send me my report it said I was at a 562. But even that one back then was higher than the 562 TU said it was at. According to the lender that pulled it when I bought my 2nd property.
I am not sure how high the other 2 have gone since I have been working on getting my credit improved. I will tell you that according to the lender that loaned on my last property I bought said it was a 640. That was in FEB. So now it should be somewhat higher. So lets say my mid score is now about 670… would I do ok with the first mortgage on this one?

Thanks again,