Mix of Mortgage & Seller Financing

5 Replies

Hey everybody, quick question.

If the seller is carrying 55% of the Note on a property and I am mortgaging the rest, how does the mortgage get secured? I cannot use the actuall property, correct?  If it fails, wouldnt the sellers loose their property?


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Depends on the seller. That's why I would suggest talking to a few lenders, particularly credit union's and lenders that keep loan's in house. If there is no current financing on the property, I guess it would be possible to find a lender that would be willing to do a 2nd or LOC on the property. The best situation with seller financing is to give them a DP that they are happy with, say 15-20%, then a 3 year balloon, which should give you enough time to build equity in the property and roll it over to conventional financing.

In other words, you have no money?

This is a piggyback loan situation.

Bank makes first mortgage and the seller get that money at closing.

Seller carries back a second, that is an equity loan based on the sale price.

The bank will require you to have skin in the game, generally 10% down.

Otherwise, the seller needs to refinance and then sell as a sub-2, sounds like your seller isn't that motivated.

The seller could finance the whole thing and sell the note or any part of it.

Get another lender to make a second purchase money loan. :)