My broker told me today that Lenders no longer allow owners to carry back a 2nd to help people into a home. Is that true? I'm looking for a lender that allows this type of owner financing.
2007-11-28 06:54:48 · 5 answers · asked by Ted (Canton,OH) 2 in Business & Finance ➔ Renting & Real Estate
There are many lenders that will allow a seller carry back 2nd mortgage.
The thing about this seller carry back second is that t must meet with the 1st mortgage lenders approval.
There are certain restrictions that have t be met in order for the 1st mortgage to approve this type of transaction.
Since you will be paying additional money on the second the first will wanna know based on the information they have about your income does it fit into their front and back end ratios.
You have to contact a competent mortgage broker, they have many mortgage programs that might underwrite this type of mortgage.
It does not matter what a lot of individuals think or say over 80% of the mortgages originated are originated through a mortgage broker.
LIke any other career field you have to ensure that you have a competent one. Look for you another broker.
When you contact the other broker make sure that he is able to complete an application and run a credit report on you and anyone else that will be on the mortgage.
This is the only way you will know for sure. Without an application and credit report you might as well be talking to the moon.
This is the only way you will ever know for certain the mortgage programs you are qualified for.
Now once a few mortgage programs have been offered, sit down with the broker and go over each to see which is best for your situation.
Get as much knowledge as you can about each so you can make an intelligent decision. No matter what anyone say or do, you are the decision maker.
You will be required to sign mortgage loan docs. Make sure they are exactly as your mortgage broker outlined as to th interest rate, how long the mortgage is for, if the mortgage is a fixed or adjustable.
If it is not as you discussed, please don't sign the loan docs, because after you do you are not responsible to make the monthly payments.
No matter how many times you say you did not understand the mortgage loan docs, it will go on deaf ears. Normally the signer will tell you the interest rate, if it is an adjustable rate and the terms. Make sure they are as they are suppose to be.
Once you are comfortable with the terms of the loan mortgage docs, by all means sign them.
I hope this has been of some use to you, good luck.
"FIGHT ON"
2007-11-28 08:29:52 · answer #1 · answered by loanmasterone 7 · 0⤊ 0⤋
The broker is very incorrect.
What lenders won't allow is for a "hidden" 2nd to be carried. It must be recorded at the time of closing, and there must be a note that the lender can review the terms for, because the lender will take that into DTI consideration when approving the 1st loan.
There are some programs that have additional requirements, such as the 2nd cannot cause a negative equity situation (ie. 125% LTV), or anything else that is at high risk for foreclosure.
Not sure what the other poster meant by "it can't be a Fannie Mae product" because it's not true.
Fannie Mae cannot discriminate against WHO carries the second. If a note is written by an attorney, and is legal, it's no different than a loan carried by a bank, and must meet the same guidelines.
Lenders will want to see the 2nd note for ANYONE in 2nd lien position, bank or not.
2007-11-28 07:42:45 · answer #2 · answered by Expert8675309 7 · 0⤊ 1⤋
To the best of my knowledge owner carry backs have disappeared in the current lending fiasco. I know of no lenders offering this product. Possibly a private lender (hard money) but that is probably not a loan you even want to engage. Try calling a mortgage broker, be careful if it is not a Fannie Mae product.
2007-11-28 07:34:47 · answer #3 · answered by swalker 1 · 0⤊ 1⤋
I suspect that your broker is misinformed.
My experience is that brokers are very poorly trained and have little or no expertise in the area of real estate and financing.
I recommend that you contact your credit union if you are a member of one or contact the bank where you have your checking and savings accounts.
2007-11-28 07:33:10 · answer #4 · answered by Anonymous · 0⤊ 1⤋
thankyou for all the answers.
2016-08-26 08:37:42 · answer #5 · answered by Anonymous · 0⤊ 0⤋