Part Bank Part Seller Finance Question
I have an interested buyer, but she can only qualify for 80% of the asking price. 3 questions
1. If we carry 20% of the note, will we get our equity out so that we can purchase another house?
2. Could we take out a home equity loan to cover our down payment on our new house, and carry the entire loan ourselves?
3. if the bank did finance 80% and we finance the other 20%, what happens to the property if she defaults? Does it all go to the bank, or does it go back to us?
1. How much equity do you have? You would get anything over 20%.
2. I would imagine that you could take out a loan on your current house for a down payment on your new house and then carry the loan. But if the bank says that she can't afford it, chances are that she can't. You may not be able to do this if your debt ratio is too big.
3. I believe that if the bank financed 80% they would be the first mortgage and you would be the second. Thus if she defaults the house would goto the bank. Any proceeds would be given to them then you. (Or you could just get the property back from the bank).