Lending Money To Home Buyers
Can someone give a little advice on the situation. I was approached by a gentleman that wants to buy a new home but also wants to keep the home he lives in now. He needs 17k to put down on the new construction home 650k until he takes out a loan against the old one he lives now 280k. He also wants to keep the one he live in now. He asked me would I put up the 17k until he completes the equity line against the old one. I told him that a transaction like that would require a high interest rate and the loan would have to be secure by the Old home which has 80k in equity. Since I’m a newbie I really don’t know much more than that. He is worried about the aggressive housing market right now and wants to make sure he gets this new home lock in at the current market price. He seemed very motivated for the loan and he told me that he plans to pay the 17k off as soon as the other loan was approved.
New home 650k
Old home 280k
Equity in Old home 80k
Loan he wants 17k.
How do you structure a transaction like this? Or am I over my head for a newbie? I will seek legal advice but I want to hear how some of the experts do first. Thanks for you help in advance.
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