Buying a forclosure with private money

[Nate Jones]

Hello everyone. I am new to the forum and to real estate. I have been reading and researching on this site and other places getting ready to make my first purchase. I put in an offer on a bank owned foreclosure and we finally came to an agreement. I have a local private money lender willing to loan on the purchase but someone was telling me today his terms seem a bit much. I came to an agreement of 57k with the bank. The private lender will give me 47k and I have 10k. He is telling me my 10 and his 47 will go to the bank but his note to me will be for 57k @ 8% interest. So his 47 is costing me 10 for a total of 57 plus my 10 down. I just figured that's what it was costing me to do the deal but an accountant was telling me that they don't think this is even legal. Any input on this would be much appreciated as I am closing in 10 days.