Posted by Jimmy on December 23, 2005 at 08:00:43:
nt
Replace the 1st, leave existing 2nd in place - Posted by Ben
Posted by Ben on December 21, 2005 at 19:14:26:
How can a purchase be structured such that a new first mortgage is put on a property in the name of the buyer, and the existing second mortgage in the name of the seller remains in place?
Re: Replace the 1st, leave existing 2nd in place - Posted by Brian (UT)
Posted by Brian (UT) on December 23, 2005 at 09:59:50:
Ben
Yes, a subordination agreement is done all the time as John and Jimmy have stated. But you need to place yourself if the shoes of the second holder.
Why should I do this? Is the new first going to be greater than the old one, thus reducing my safety cushion and increasing my risk? Is the interest going to be higher than the old first loan thus increasing the payment and the amount of money available to make the payments on my loan? Is the new borrower financially weaker or stronger than the old one?
I see what’s in it for you, but what’s in it for me? These are the questions you will generally need to answer to get your subordination agreement.
Brian
Subordination - Posted by John Merchant
Posted by John Merchant on December 21, 2005 at 22:43:34:
This can be done, but only if the existing 2d agrees in writing to let you put a new mortgage ahead of his.
This is known legally as Agreement to Subordinate and is done all the time.