Seller Financing but Seller has a Home Equity Loan

2 Replies

We have a deal that is two homes totaling $350,000 with about $90,000 in a Home Equity Loan on the properties. We would like to do a Seller Financing deal but were advised to not do so if it has a HEL by an advisor.

Should this be a concern to us? How do you structure that deal for Seller Financing do we just do a lease instead of a subject to? We have access to a line of credit that could pay off the HELs, would you not recommend that?

We are new to Seller Financing and want to make the best decision any advice?

I agree with your advisor and wouldn't do a seller-wrap with a HELOC. Risks of the DOS being activated is too high. Is the deal is good enough, a lease with option to buy may be in order. If you want to access your credit line to pay it off, you may as well finance it out, right? I wouldn't put $90k down on a seller-financed deal. L/O or buy it outright. Those would be my 2 ways if all else looks good. Hope this helps @Matthew Rue !

Thank you for the advice Steve! We ended up going that route and are structuring a lease option deal with the client.

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