Second Mortgage

Private Mortgage- Would it matter if you are in a different country?

Yes, the real estate laws differ even from state to state in United States of America. Still the answer depends on the laws in your country/state and how easy it can be for you to set up your own mortgage. So here are some general rules for the home owners in Australia which are different from US Real Estate laws.

So what you do when you are in a different country where first, send them to a mortgage broker accredited with all lenders. You may find they can get a non-conforming loan at a slightly higher rate and save yourself the trouble. Read the rest of this entry »

There are different ways you can set up a private second mortgage. But is it risky?

Suppose you have a house that is rented and the renters would like to buy it. You quote a price, but the lender can only give you  85 percent of the total price, because they have some bad credit. So you decide to offer a 15 percent as a second mortgage to them. You want to set it up like — 15 or 20 year amortization, 7% or 8% interest, with a 5 year balloon.

Does this sound reasonable? And how far would it go to help you in this deal? It is not as difficult as most will have you believe. A title company will record your deed along with the first trust deed at closing. Make sure there is a penalty for late payments also make sure there is a date that they must pay before. The amortization is up to you as well as the due date. Read the rest of this entry »

Should you go for seller’s second mortgage?

Let’s say that you are trying to sell your house. The sales price is $150,000; the buyer is able to get a loan for 96% of the sales price. However, they want you to do a Seller’s Second Mortgage for the remaining 4% ($6000). How exactly will that work? And should you go for it?

It’s basically a second mortgage in which you are the “bank” so to speak. It’s called a Seller Carry-back. You can charge interest and set specific payment terms and even foreclose if they don’t pay. A Deed of Trust is recorded on the property behind their first lender. Read the rest of this entry »

What happens to the second mortgage when a home is purchased at a foreclosure auction?

So you are going to bid on a house at foreclosure. The lenders for the first and second mortgage are different. Does this mean that you will buy the house at foreclosure plus the second mortgage or just the first mortgage and taxes?

Buying a house at a foreclosure auction is easy. When a senior lien forecloses, a junior lien is wiped out. So if the first mortgage holder forecloses, the second trust deed goes away. If the second forecloses, you’ll still owe the first. Read the rest of this entry »