They have to sign something stating that the contract provided to the lender is the entire deal, that there’s nothing being done between them and you that would provide an inducement to sell. Certainly, agreeing verballing to finalize a loan after closing or to purchase art for 20K is an inducement so you basically have to ask your seller to commit fraud. Is that something you really want to do? And, perhaps this isn’t an issue, but you will have to come up with the 10% plus costs upfront and source that money (show you have either had it for 2 months or show where it came from) for your lender. What you are suggesting is illegal but CAN it be done? Sure–if you and the seller really want to do that. The way to borrow 100% is to get approved for a 100% loan (they are RARE and very tough if you find them). If you apply for the Fannie 90% investor loan (which I assume is what you have approval for) then you need your 10%. Have your lender look into some non conforming investor loans at 80% that will allow a 100% CLTV and then you can have your 20% second. The 1st rate will be HIGH because this type of loan is higher risk to the lender.
I have been approved for a 90% LTV mortgage. Although I don’t have a specific property in mind yet, my goal is to put no money down and hold the property as a rental. With the LTV already mentioned, how would I do the paperwork with a seller who is willing to carry back 10%-20%? Basically, I want to have the owner carry back 20% and have the other 80% through a mortgage and not put down any of my own money. However, my mortgage broker has said that the lenders won’t do this type of deal. What does the paperwork need to look like so that the lender doesn’t know that the owner is carrying back the rest of the cost?
Thanks!
Instead of trying to find ways to mislead a traditional lender, invest in your education on how to buy properties WITHOUT GETTING A LOAN!
There’s no sense in placing new loans in your name as an investor. It’s way too easy to take over payments on EXISTING LOANS…with no fraud, no risk to you, and especially none of those ridiculous “seasoning” and “sourcing” requirements.
If you have an approval for a 90LTV loan, then the lender will require you to source your 10% plus any of your closing costs and show on the settlement statement that you are bringing that money to closing. If you show it “in escrow” they will require that you show the transfer from your bank account into the escrow account. Unless you have an appoval for a 100% CLTV (combined, meaning you can have combined loans up to 100% with 90% from them) you will not be able to legally do the second you are referring too. In this type of deal, the seller will be required to sign a document at closing saying there was no $ exchanged outside of closing so if they took back a second without disclosing it, they are also committing fraud. It’s very awkward to ask them to do this even if you figure out how to get around the lender, which again, is tough!
What if there was no money exchanged outside of closing BEFORE the closing, but after the closing and everything was said and done the seller just happened to loan you an amount that just happened to be about 20% of the selling price. You know, say a week or two after the closing. Or not even a loan, what if they happened to buy a piece of artwork from me, etc… a piece of artwork that we decided was worth about 20% of the selling price of that house. Aren’t there any creative ways to do this type of thing? If not, am I understanding it correctly that the only ways to buy a property with no money down are to find a seller who is willing to finance 100%, or somehow find a motivated seller who will sell you their property for 80% or less of the fair market value?