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Additional payment arrangement with seller

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samy2576
New Contributor

Additional payment arrangement with seller

Ok, so I need real answers to this, not just oh thats a bad idea or i don't know.

 

Say a house is on the market for 35k. You want to offer 31k but you can only get approved at the bank for 28k. Amount I have for downpayment basically equals the closing costs to be financed back so that essentially cancels out. So we are left with 3k we can't cover. The seller has already bought another house and wants to move back to NJ permanantly (we are in PA), so she doesn't even live at the house except like once a month. But she only bought this house last year and cant afford to go lower on price. Is it possible to pay her the 3k difference outside of the mortgage? Like we can pay her $500 a month until the 3k is paid off.

Message 1 of 23
22 REPLIES 22
Blackhawks_girl30
Contributor

Re: Additional payment arrangement with seller

If she owes less then I would try to get her down on price  If what she owes is the 35k then all of that will be needed in order to close this deal.  I'm not sure if it works the same as IL, but here I was not given a key until the loan was fully funded to the bank while I was sitting at the table.  If the bank that currently owns the mortgage is shorted money then I would assume a clear title could not be issued in your name.  I may be totally wrong on this, but just my opinion.

Message 2 of 23
StartingOver10
Moderator Emerita

Re: Additional payment arrangement with seller

Essentially what you are asking is for the seller to hold a small 2nd for you, payable in installments after closing.

 

Your lender on the first most likly would not allow it. I know FHA wouldn't allow it with a small downpayment, like 3.5% and you would have to disclose it to the lender.

What kind of loan are you getting for the house?

 

Message 3 of 23
samy2576
New Contributor

Re: Additional payment arrangement with seller

Yes I know that. I already talked to her and like I said, the lowest she can go because of that is 31. That's why I need to cover the other 3k somehow, outside of the mortgage. I cannot qualify for more as I make very little money and have student loans.

Message 4 of 23
StartingOver10
Moderator Emerita

Re: Additional payment arrangement with seller

If you qualify for 31k on a fixed rate, does changing the mortgage to an adjustable rate get you a few $$$ more?

What type of mortgage is it that you have been pre-approved for - FHA or conventional?

Message 5 of 23
samy2576
New Contributor

Re: Additional payment arrangement with seller

Yes I guess that is a good way to put it. She can make up the difference temporarily but would need paid back. 31 is a fair price and I'm not trying to under cut her or something. I am the only one interested in the property so she is willing to help.

It is a USDA loan I guess. She calls it rural housing.

Message 6 of 23
StartingOver10
Moderator Emerita

Re: Additional payment arrangement with seller


@samy2576 wrote:

Yes I guess that is a good way to put it. She can make up the difference temporarily but would need paid back. 31 is a fair price and I'm not trying to under cut her or something. I am the only one interested in the property so she is willing to help.

It is a USDA loan I guess. She calls it rural housing.


What do you mean by this? Drop the price? (acceptableGive you the difference in down payment? (not acceptable)

Message 7 of 23
samy2576
New Contributor

Re: Additional payment arrangement with seller

Dropping the price. I have 10% for the downpayment, which my loan officer said was good.

Message 8 of 23
StartingOver10
Moderator Emerita

Re: Additional payment arrangement with seller


@samy2576 wrote:

Dropping the price. I have 10% for the downpayment, which my loan officer said was good.


Smiley Happy Perfect!

Message 9 of 23
DallasLoanGuy
Super Contributor

Re: Additional payment arrangement with seller

this would be a 'seller second' and will likely not be allowed by your lender.

 

ask them

 

Retired Lender
Message 10 of 23
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