Mechanics of Seller Carrying a Second Lien

[Brandon Sturgill]

What are the mechanics of a seller carrying a second lien?...and would the process simply be that they apply for a HELOC and loan the cash?...or can this be structured some other less intrusive way?

[John Thedford]

@Brandon Sturgill

Carrying back a 2nd also allows buyers to complete a purchase if they cannot qualify for a bigger loan. The other positive with a seller carry back is the seller receives interest as though they are the bank. The negative side to seller carry back on a 2nd is if the 1st defaults, the 2nd position lien holder MUST buy out the first either before foreclosure or at foreclosure to protect their interest. Otherwise, if the sale only brings the amount due on the 1st, the 2nd is wiped out and the note holder gets -0-.