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Seller Financing
Another occasional
request is to have the seller "carry back" a second mortgage to
help facilitate your purchase of their home. In cases when the seller
does not need all the proceeds from their sale in order to purchase their
next home, this is an option. The advantage to the buyer is that by
combining your down payment and the second mortgage from the seller, you
may be able to avoid paying mortgage insurance and save yourself some
money.
If such a carry-back
is part of your offer, you should include the terms you wish to pay on
such a second mortgage. Keep in mind that your first trust deed lender
needs to know this information so they can underwrite your loan, and they
have certain minimum requirements. The minimum term of the second
mortgage can be five years. The minimum payment can be "interest
only." Longer mortgage terms and payments that also include
principle are also acceptable.
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