Seller Financing
I want to buy a 3 family for $350,000 that needs approx. $20,000.00 of rehab. The seller will hold $100,000 for 5 years. I want to get an 80% loan for $280,000 and use the $30,000 for closing costs and rehab. A true no-money-down deal.
How do I approach the lender? Am I honest? Do I not let them know about the 2nd mortgage? Do I have to do an unrecorded 2nd Mortgage?
Please help and thank you in advance.
Ferris83
Ok, 1. would the seller even consider unrecorded? and 2. if the first lender doesn't know about the 2nd and work that in to the equation (CLTV/Debt service ratios) you would have to bring to the closing $70,000 and trust the seller to return it after closing and exchange it with a note. If the lender will allow a seller second for 100% cltv, and the ratios will work, why not just do it like that and then after the closing work out the other transaction to get the extra 30k. Also I have never seen a lender knowingly allow a second mortgage that combines with the first for a ltv over 100%.