You get a loan from the bank for $75K (1st mortgage aka first position lien)
You get a loan from the seller for $20K in second position (aka "a second".
You borrow 5K from grandma and give her a 3rd position lien.
If you were to stop making your payments, they would get their money in that order. If they only got $80K out of it when they sold it, the 1st gets thier money, the second gets part of theirs, and you get nothing from grandma's Will!
(because she got nothing from you)
Thank Hibby. It's getting clearer. So what you are saying is that the seller will be getting monthly payments from me? or will he/she be getting all cash for the second mortgage and i make the payments to the bank for the first and second mortagage.
Second mortage holder will get the payments. (If the seller took the mortgage seller gets the payments.)
FYI:
There are two documents critical in the mortgage process. ( Whether first or second)
1. The buyers gives a note to the lendor. this note says I will pay you so many dollars at such and such interest rate, over so may years etc. This is the NOTE.
2. The second paper says, "if I don't pay you with in the agreed terms you can take my house. This is the MORTGAGE.
$100K property
.
You get a loan from the bank for $75K (1st mortgage aka first position lien)
You get a loan from the seller for $20K in second position (aka "a second"
You borrow 5K from grandma and give her a 3rd position lien.
If you were to stop making your payments, they would get their money in that order. If they only got $80K out of it when they sold it, the 1st gets thier money, the second gets part of theirs, and you get nothing from grandma's Will!
(because she got nothing from you)
Get it?
Thank Hibby. It's getting clearer. So what you are saying is that the seller will be getting monthly payments from me? or will he/she be getting all cash for the second mortgage and i make the payments to the bank for the first and second mortagage.
Second mortage holder will get the payments. (If the seller took the mortgage seller gets the payments.)
FYI:
There are two documents critical in the mortgage process. ( Whether first or second)
1. The buyers gives a note to the lendor. this note says I will pay you so many dollars at such and such interest rate, over so may years etc. This is the NOTE.
2. The second paper says, "if I don't pay you with in the agreed terms you can take my house. This is the MORTGAGE.
[addsig]