Posted by Doug (ON) on October 25, 2001 at 15:37:48:
In that case, why don’t you see if the seller would like some monthly income?
Doug
How Can We do This - Posted by Marc
Posted by Marc on October 25, 2001 at 11:01:44:
Getting a 90%LTV loan on a 155K house. Seller really only wants 140k, and would give 15k to cover other 10%. Mortgage co says that this is a sales concession, and not allowed to go towards my down payment. What am I doing wrong?
Here’s How… - Posted by JT - IN
Posted by JT - IN on October 25, 2001 at 19:49:17:
Marc:
Your question is a littel different than most onthis board, because you are looking for the following: 1) Purchase a Personal Residence and 2) Pay Fair Market Value. Most folks here are buying investment property, and looking to purchase at below FMV, which you would be doing to a degree, if your estimate of value is correct.
Find a Lender who does either Ameridream or Nehemiah lending. Essentially, these two programs work as follows: The seller can gift 3.75% to the program, to be used for the buyers downpayment. The program keeps .75% and transfers 3% at closing that is used, legitimately for the buyers downpayment. So, how you would structure your deal would be for you to agree to purchase the property for $ 145455, from the seller, of which the seller would gift $ 5455 to the program, and the program would tender $ 4330 to you at closing for your downpayment. The balance ($ 140K) would be an FHA loan; or equivilent to 100% of your original agreed upon purchase price. Likewise, the seller can pay up to 3% of your closing costs, by inflating the sales price even further, and this would be a credit to you at closing.
Hopefully this is what you are attempting to do, and this will steer you in the right direction. Good Luck.
JT - IN
Re: What you are doing wrong is… - Posted by Ed Copp (OH)
Posted by Ed Copp (OH) on October 25, 2001 at 17:24:12:
Asking the lender for a 100% loan in essence. Is it illegal? Possibly the way you have presented it, but it is not going to work this way, is it? If you conceal it and the seller just gives you the money “under the table”, then for sure it is illegal. You and the seller will be conspiring to defraud the lender, and yes, incidenty]ally; it is done all the time.
I quess you want to know how to do this legally (sort of at least). You need to sell something to the seller for an amount equal to the down payment that you need (and do not have). This needs to be something that is not readily tracable, like a coin collection.
So you the buyer have no money, and you sell your coin collection to the seller for $X (whatever amount you need), and the buyer pays you at closing so you can pay your down payment and expenses at closing. Work out the transfer of funds (out of sight, under the table so to speak). The lender will know what you are doing, but most likely will have thier head turned (so to speak). You see the lender is not concerned about the value of coin collections. The lender is concerned about operating within the laws that govern thier industry.
Now this would probably work with a pocket knife collection too, be creative.
MORE! - Posted by Doug (ON)
Posted by Doug (ON) on October 25, 2001 at 11:32:20:
We need more details if we’re going to help.
What does the seller owe?
Does the seller NEED any cash right now?
Why is the seller selling?
Why is the seller willing to ‘give’ you $15k?
Depending on the answers to these questions, you may not need to involve the mortgage company at all, or at least involve them in a different way than the one you’ve indicated.
Doug
Re: MORE! - Posted by Marc
Posted by Marc on October 25, 2001 at 12:43:20:
Seller owes nothing. Not sure about her need; this is not a distressed situation. Seller is giving 15k (10%)to make up for the down payment, which I don’t want to give out of pocket. Is this illegal, to get seller to pay for my down payment?
Lemme get this straight - Posted by Doug (ON)
Posted by Doug (ON) on October 25, 2001 at 13:21:56:
- You have no idea what the seller needs or wants.
- You say she’s not distressed.
- You’re considering paying nearly full price in cash.
- And you’re considering doing something you’re not sure of legally in order to acquire this property.
If the above is right, then you have my most sincere prayers. I hope you want this house for your own residence, because with the ‘strategy’ you’ve outlined, you have ZERO chance to profit from it.
Is down payment gifting illegal? I don’t know, I’m not a lawyer. But let me tell you this… that isn’t the question you should be asking about this situation!
Doug
Re: Lemme get this straight - Posted by Marc
Posted by Marc on October 25, 2001 at 14:15:29:
This is personal residence; not looking for profit. Just trying to see if anyone has gotten a gift/money for down payment from a seller