Creative Financing is needed!

10 Replies

Hello,

So, for this time, my topic is about using creative financing! For a first time buyer, with good credit, however, overextended in debt. Can someone like this obtain funding to buy a property within their price range they believe that they can afford? What's taking the borrower over his debt to ratio limit on this one is his high balance student loan! Other than involving the seller with any seller's contribution, how else can this be done to facilitate a closing for this borrower? Any advice, anyone?

Tons of options:) Where are you wanting to buy?

If your looking for owner Financed Houses in or near San Antonio our company has some.  

Lots of options out there’s and threads on BP that ask the same thing.

Well, this purchase is in South Florida's eastern region to a first-time buyer. Owner finance isn't the first option because the seller wants cash! The buyer will be sharing expense/renting a space for some time to supplement income. However, the buyer feels that he can pay the mortgage on his own. There's a high probability that this property requires a twenty percent down payment, plus closing to purchase (non-FHA, etc.). Is there a way around that with a particular type of loan/mortgage, the buyer only has ten percent down payment and the closing cost? Thanks, I will look into more BP's resources.

1st Time buyer? Look at your state bond monies that are available to people like this. State bond may help consolidate the school loans in a smaller payment then do the loan for the property. That's one way....

2. you may be able to qualify with a hard money loan that takes 10% down and with finance for a year so the buyer could possibly refinance out of the loan after a year.

Last, look for adjustable loans that have a 2 year interest only loan that will allow the buyer to consolidate the present student loan into an equity refinance loan and rid himself of the student loan all together.

The buyer probably needs to go to a mortgage broker. They will know lots of different types of mortgages by different companies. Not all loan companies are the same. The ones who do FHA loans WILL have all the same underwriting criteria. There are 10% down companies, which will probably be slightly higher rates than 20% down. There are even some stated income loans out there. You just need a good mortgage broker to find them for your buyer.

Originally posted by @Rick Pozos :

The ones who do FHA loans WILL have all the same underwriting criteria.

Not necessarily. Banks are allowed to have overlays, different FICO requirements, some banks will not do FHA on a triplex even though the program allows for it, etc.

Originally posted by @Henry Clements :

Well, this purchase is in South Florida's eastern region to a first-time buyer. Owner finance isn't the first option because the seller wants cash! The buyer will be sharing expense/renting a space for some time to supplement income. However, the buyer feels that he can pay the mortgage on his own. There's a high probability that this property requires a twenty percent down payment, plus closing to purchase (non-FHA, etc.). Is there a way around that with a particular type of loan/mortgage, the buyer only has ten percent down payment and the closing cost? Thanks, I will look into more BP's resources.

since you say that it's not FHA qualified then he will need to take in consideration that if he needs to sell in the future then it will be harder to sell!

 

It’s called creative financing for a reason . Look all sellers want cash . In fact in just about every case They will all insist on cash sales , you needn’t fret over that accept it and move in for the kill anyway ..it’s your job to persuade them that is not what they really want and why they should sell to you on terms by showing how it is to their advantage . 

Thanks, Chris, thanks, Meir! Meir, It can qualify as an FHA for the same 20% down. So, why not go conventional at that point? Regards to the selling aspect, the property sits in front, across the street, to luxury properties with more than twice the value; B, turning A class neighborhood. Hence, making it desirable to purchase and the notion of the reason why the seller wants cash!

Food for thought on this idea: 

If we were to entertain the seller with seller's assist, which strategies will you suggest using? Typically I'd like to present two-three offers that are a win, win for both parties.

Well, perhaps I should open another discussion on this topic?

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