A second is a mortgage that is recorded after the first mortgage that is recorded on a property. The term is also carelessly, but commonly used to refer to any junior loan recorded after the first.
In your case, the 5% down payment loan would be a seller-financed “second” because it will be recorded after the buyer?s loan for 90% of the purchase price for which they have been approved.
Second mortgages are complex. If you give the buyers half of the down payment, let a good real estate attorney that you have retained for the purpose take care of the paperwork.
The creonline.com forum called “Cash Flow,” is dedicated to buying and selling notes, including seconds. Lot?s of info in the archives. Try a search for ?second mortgage,? ?seller carry back,? and the like.
I have a very interested party to buy my house. They are approved already but need a 10% down payment and they only have half of that. Is there any kind of option I can offer them. I can’t finance the whole thing but probably could the other half of the down. Is that an option?