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Updated over 6 years ago on . Most recent reply
why would an owner take 2nd position when offering seller finance
why would an owner take 2nd position when offering seller finance?
owner is offering to seller finance a property he owns.
buyer wants the property but wants owner's mortgage to him to be in 2nd position to his (private money) down payment
why would a seller risk the chance to foreclose if payments are missed by taking 2nd position to the private money lender?
signed, perplexed in Poughkeepsie... :)
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#1 Short-Term & Vacation Rental Discussions Contributor
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Ann, The seller might be having a hard time selling due to location or condition of the property. By offering to take back a 2nd mortgage it helps get his house sold. Also since private money is the first mortgage maybe there is a balloon payment due in a year or two where the seller will only be making this loan for a short period of time.
The seller will be getting a chunk of money from the first mortgage and may be happy to make interest on the 2nd mortgage for a longer time.