Current seller financed house vs. future mortgage?

[Thomas Hickey]

Hi All! Wondering how a home purchased through seller financing on a promissory note would come into play when qualifying for future mortgages? 1.) would I have to notify future mortgage company of loan? 2.) would they have any way of knowing that it exists? Thanks, Tom

[Chris Mason]

Hi @Thomas Hickey,

There is nothing special about a seller carried note. We view it as a mortgage like any other, period.

I've had people try to be sneaky, and then one of the last steps before ordering docs (AFTER clear to close from underwriting, and typically AFTER you have lifted all contingencies) is the fraud check, which sure enough shows the recorded lien, and boom deal dead. 

Undocumented immigrants using an SSN from the graveyard, and undisclosed private mortgages, are the two most common things caught by that last-minute check.

@JD Martin, not quite. It will still count as a financed property, and the Fannie cap of 10 will apply just the same.