Question about purchase money mortgages - Posted by Claude (Sacramento)

Posted by Michael Morrongiello on November 08, 2000 at 18:09:30:

We just did a deal where the property seller took back a 1st lien “purchase money trust deed & note” not on the sellers property that she was selling but on another property we owned.

It is very well secured and represented adequate value and security for the seller. The seller insisted on having the property appraised and wanted to inspect it herself. Should the seller wish to convert this purchase money trust deed and note that they are carrying to a CASH lump sum instead of collecting the interest and payments, they can accomplish this as well through its sale.

We can help you make the same type of deal happen especially if your seller wants CASH rather than income from the note and trust deed.

To your success,

Michael Morrongiello

Question about purchase money mortgages - Posted by Claude (Sacramento)

Posted by Claude (Sacramento) on November 07, 2000 at 23:05:16:

Does anyone know of a lender that will provide a purchase money mortgage against equity in another property I own? The current LTV on the property is about 80% and the FMV is $100K.

Any and all thoughts welcomed!



Re: Question about purchase money mortgages - Posted by Paul Macdonald

Posted by Paul Macdonald on November 09, 2000 at 15:26:48:

About the best you can do is get either (providing the other property you own is an investment unit):

A 90% investor cash out equity loan or,
Have the seller do a take back with a substitution of collateral against your 20k equity. Than do a standard Fannie/Freddie purchase money note against the property you are looking to buy. The underwriter will treat the take back as an equity loan used as a down payment on the new property. If the property you’re looking to purchase is investor you can get as much as 90% LTV. Owner occ. up to 103% LTV (with walk on water credit).

Good luck.

Re: Question about purchase money mortgages - Posted by JPiper

Posted by JPiper on November 09, 2000 at 06:35:05:

Assuming that this property you refer to is a non-owner occupied property, you really don’t have much equity there to play with. Below Morrongiello gives you a scenario which is definitely workable…however his scenario involves a secure first mortgage…NOT a high LTV second.

I could see you being able to use a little of your equity perhaps as downpayment for a cross-collaterlized type of loan with the right lender (a bank). But again, you don’t have alot of equity there, and alot would depend on the strength of you as a borrower.