Buying A Home
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
conventional mortgage + owner-financed 2nd mortgage
Has anyone ever purchased a house where the owners financed a portion of the sales price (i.e. 2nd mortgage)? We are looking at two homes tomorrow with original owners, elderly, who are looking to move to more suitable homes for their needs.
Both have mentioned owner financing is a possibility. If you've purchased a home using all/partial owner financing OR have been the financer yourself, I would love to hear your feedback. We'd like to know some positives & negatives of this option.
TIA!
Re: conventional mortgage + owner-financed 2nd mortgage
Our house is owner financed. So far, I haven't seen any downside. We have an amortization schedule and everything. It also does not show up on our credit report. I don't know if that is a good thing or a bad thing, but our credit score is awesome right now.
Can I ask why you want to get a conventional mortgage an then the sellers hold a 2nd mortgage? Why not just get one mortgage from a bank? Typically 2nd mortgages carry higher interest rates and so do seller financed mortgages. I would also talk to a lawyer about what would happen if the sellers died. Would the note be due upon death or would their estate take over for the remainder of the loan?
Those are excellent questions, as the owners are elderly. We are looking to stay in a conventional loan & not a jumbo loan. IF the home we were to buy was over the threshold for a jumbo loan, we would have a conventional mortgage up to the highest limit & would be interested in discussing the owners finance the remainder.
For example, jumbo loans are anything over $417k (& we're approved well over, credit is not an issue), but we would prefer not to have to put 20% down plus have a higher interest rate. If sales price is $447k, we would ask owners to finance $30k.
I appreciate everyone's help!