JP - creative mortgage question - Posted by pat

Posted by pat on December 03, 1998 at 10:57:18:

Thanks J.P.

Once the note is funded, will I be committed to hold on to the property until the scheduled first 12-18 monthly payments are made or can these payments be prepaid (maybe in a lump sum)so I can have the property resold immediately to a new buyer?

JP - creative mortgage question - Posted by pat

Posted by pat on December 01, 1998 at 12:22:41:

you have a brilliant way of making something so comlpex easy to understand, however I still have questions.
After reading your article on creating a mortgage, I spoke to a few note buyers to see what exactly they were looking for (in terms of yeild, # of payments,LTV and interest rate)in today’s market. Some(investors) are not familiar with what I trying to accomplish. They kept asking me for information on the payee (myself) background such as credit,employment, original downpayment before they could fund the escrow account. Just want to know if this typical or did I miss a step.

Thank you.

Re: JP - creative mortgage question - Posted by J.P. Vaughan

Posted by J.P. Vaughan on December 01, 1998 at 17:30:20:


Glad you liked the article. You are creating what is
called a “purchase money first.” There is no seasoning,
and as long as you have a good LTV, that shouldn’t
matter, and neither should your credit. I believe I
mentioned that we “prepay” the first 6 months.

There are institutional lenders who will buy this kind
of note these days.

We sold to private investors from newspaper ads, etc.
When there are very few firsts in the marketplace, and
when most available seconds are junk (like in today’s
market), you should be able to sell these notes quickly
as long as you are offering a good yield and a low LTV.

You may be having problems because you are not dealing
with PRINCIPALS but with “finders” who don’t really
know what they’re doing. Always deal with the principal.