MORTGAGE ASSUMPTION-SUBJECT TO

[Bob Razler]

Hello All:

I have a question about how to structure a deal, if it is possible at all.

FACTS:

I am the buyer.

The seller and I have an AOS for $300k.

The seller has an existing mortgage on the property with a balance of $60,000. This mortgage is in first position.

I am financing the purchase and was approved and ready to close with 25% down @ $300k.

The appraisal came in at $270k.

The seller did not want to lower the price.

I offered to close by financing the $270k and the seller extending me a note for the $30k shortfall.

The seller would like to walk away with more at the closing table.

I would like to offer to assume their mortgage/take subject to it.

QUESTION:

Since both lenders would want to be in first position, I don’t see how it would be possible to leave the original in place under the scenario.

Does anyone have any thoughts on how to structure this, if at all?

Thank you,

Bob

[Wayne Brooks]

You're right, an assumption is out of the question. If he wants 10% above appraisal, it needs to be on your terms. Best to not offer $300k.

[David Faulkner]

How about buying sub-to existing mortgage, down payment + owner financing in 2nd for the rest ... trade purchase price for loan terms.

[Bob Razler]

Hello @David Faulkner.  That is the plan right now.  They will finance the difference.  I was just trying to structure a deal where I put even less down.