Posted by Bobby on October 05, 2000 at 16:11:58:
Please include me in that email too…thanks.Bobby
Need $$–2nd mortgage??? - Posted by Jessica
Posted by Jessica on October 03, 2000 at 21:54:19:
Would anyone be able to tell me if it’s possible to arrange for a second mortgage before I’ve actually closed on a property?
I have a single-family home that I’m closing on with a conventional 10% down mortgage at the end of October. I need to find the 10%, which comes out to about $20K. I’d also like to be able to pull out some equity for rehab as soon as possible.
Any ideas?
Re: Need $$–2nd mortgage??? - Posted by Bill Young
Posted by Bill Young on October 11, 2000 at 18:59:11:
Jessica, no one, beside your mother is going to give you a 2nd behind a big, fat, 90% first mortgage, except the seller!
But tell me this, how much did you put down on contract? In NY they want 10%. Assuming you did not do this, you are going to have to come up with the balance or you can lose whatever you did put down and be sued for breach of contract!
Your best hope, assuming you have no other choice, is that the seller is motivated enough to give you a second. You apparently will need the closing costs as well, which could be another 3-4-5% depending on your City and State transfer taxes. Fuggedabout “pulling out some equity for rehab”, you have no equity! (90% first + 10% second = 100% mortgaged) unless you are an award winning actress!
I was in a similar position on my first purchase. I was $12,000 short at closing. Usually, the seller will realize it is better to take the 80-90% proceeds from the first mortgage, and give you a second, than start a big stink, assuming he has the room to do that. That $190,000 laying on the closing table is hard to resist!(That is, if he doesn’t need 100% of the proceeds to pay off his debts, buy a new house, etc.)
So, start rehearsing your best Sarah Burnhart impression, complete with glycerine tears, your going to have to come up with quite a sad story as to what happened to the money you were going to put down! ( Don’t bother to use the one about the Peruvian kidnappers, that one is too old!)
Perhaps there are others, wiser than I am that can come up with a better ending to this dillema. If so, I would like to be informed of it also! (You might also be able to find someone with some cash, offer to make them a Partner, not a lender on a freaky 2nd. Half a loaf…)
Bill Young
Bill Young
Re: Need $$–2nd mortgage??? - Posted by Brian B
Posted by Brian B on October 05, 2000 at 02:20:31:
Jessica,
If someone contacts you to help I have a similar situation could you have them contact me as well.
Thank you and good luck
Brian
Re: Need $$–2nd mortgage??? - Posted by Jessica
Posted by Jessica on October 05, 2000 at 21:33:39:
I wanted to let you guys know how I’m working out my deal without the $$.
I’m borrowing the 10% needed for the down payment from a friend. I’ve written a promissory note stating I’d pay a $2500 flat fee on what he’s lending me and if I don’t have the money within a month after closing on the house, I’ll take out a loan to get it. This way if I can’t flip the house immediately then I can take out a 2nd mortgage because I’m getting the house about 70% below market value.
Good luck!