Mortgage + Seller Financing

[Richard Solano]

Hi BP family!

I did a search on BP, and maybe I just typed in the wrong search term, but I was wondering... if I go to buy a property, can I get a mortgage for 80% of the purchase price and do seller financing for the other 20%? Is that acceptable? If so, is there a step by step guide on how to do this?

Thanks!

Rick

[Michael Seeker]

@Richard Solano - you can finance a property any way the lenders are willing to structure it.  That being said, you will have a hard time finding a first position lender that would be okay with you funding your down payment with a loan.

I've done up to about 90% using a second position note from seller, but the first position lender was aware and okay with it.  Had I tried to go to 100%, they would not have done the first position loan.

To get around this, you could have the seller provide you their 2nd position loan after closing.  In this case, you do not have to tell the first position lender and you can add as much debt above their position as you like.  The obvious downside to this is that you have to come to closing with 20% down payment and hope that the seller doesn't somehow back out of their loan to you after they get the cash in their pocket.

Bottom line is if you're trying to use a 2nd position on a purchase, make sure your 1st position lender knows and is okay with it. If they find out about it when they get a copy of the HUD, it could cause major problems