4-family NOO 100% Financing
Hello everybody,
I made an offer on a 4 family in Mass and it got accepted. I did inspection and it went well. For some reason I thought that 100% LTV, NOO financing for somebody with 780 score is not a problem. Now my mortgage person is telling me she cant find a loan like that... and here I am thinking- easy financing- NOT. I might be able to put 5% down, but even that seems hard to obtain.
I am not looking for a particular lender- I am looking for validation "yes those loans do exist" or "nope- you are dreamin- sell the kids and get the 10% downpayment".
What do you guys think? Realistic or fiction?
Thank you in advance...
Yes those loans do exist, you do take dings on rates or points for a 4-plex and for that LTV but they are out there
[addsig]
Do them all the time! Tri-plexs and Four plexs do have some extra fees associated with them, but can be financed at 100%. The down side is that you will need 6 months of reserves, so even though its nothing down you will still need money in an account somewhere even if its a 401k.
Good Luck,
Robert
As far as that n/o/o yes can be done at 100 %ltv shop around for some brokers in the even if you need who to contact i may give you a few contacts i used in the past good luck in your search hope all works out well thanks
Yes, these loans do exist. (Board Hustling and Advertising is not allowed in this forum)
Good Luck![ Edited by Mize on Date 05/19/2005 ]
Assuming that you have no way to borrow the $100K, you might try getting a partner with cash. Your success will depend on how good a deal this is. In your negotiations with your seller, you may be able to trade down payment against price, depending on the needs of the seller.
Good luck and keep us informed.
Ed
I mean to give him some choices that involve offering a higher price, if he will accept less down payment and vice versa.
Austin.
What I believe ashwin was suggesting is to have the current owner take out a mortgage on his own property (or properties) prior to sale, presumably for about the 100k he wanted in cash. He could mortgage one, or more than one property, as he chooses. He would keep the cash.
He would then sell you the property either "subject too" the first mortgage of 100k that he took out and to a new mortgage he would create and register for the remaining 390k. Ashwin suggested sale by land contract, wich will work just fine BUT you need to be aware that title will not pass to you until the contract is fully satisfied. Though closing costs are minimal. In a straight subject too you would receive title, but there will be several thousand in closing costs to consider. In either case you "owe" the full 490k, 100k to the bank/company the former owner took a mortgage out with, and 390k to the former owner.
One technique I sometimes use in proposals of this nature is to agree to have a 3rd party manage the rent collections and payments of bills and to the bank and the former owner. This helps make someone more certian of being paid. One other thing I will offer is an "assignment of rent" clause. That is a clause in the agreement (contract) that specifies all rents are to be used first to pay the actual property expenses, second to pay the first mortagage, and third the second mortgage, and fourth myself. I voluntarily agree to be the last paid to assure a seller that they will be paid first. That is I assign the rental income to specific purposes. Provided the deal has the cashflow and value this is a solid technique for showing your commitment and sincerity.
Thanks Mantis, but can you explain how the "subject to" route works. You said I would receive title but must pay closing cost which is no problem. Will the bank on the 1st mtg agree to that or is there a specific way to structure this. Please explain, I have no subject to experience but time is of essence. Thank You
[addsig]
What owner can do is take mortgae on one or two property or he can go to the bank and simply get equity line of credit, which will not even cost closing cost. I believe he can have it at fixed rate or ARM up to 10 years. Since he is borrowing he will not pay the tax at this point but rather can take deduction for interest hewould pay, which he can pay from your monthly payment. At the end of five years when you are ready to buy out, he can repay outstanding amount back. At that point depending upon his method of receiving the money he may pay taxes. So far title is concerned, MANTIS is right, but in either case since it is owner financed, it is land contract. . Just like in case of Bank financed, the bank carries the title, in this casethe owner will carry title. But please since it is legal matter, i suggest you talk to your attorny.
sounds good