How Seller Carried 2nds Can Help Both Buyers & Sellers Get What They Want

More recently you might hear folks complain that qualifying for a mortgage is more difficult than ever.  While this may be true in some sense, I’d like to share a concept that isn’t very popular but may help – How Seller Carried 2nds can help both Buyers & Sellers get what they want.

What’s a Seller Carried 2nd?  That’s when the Seller of a home decides to extend a loan to the buyer.  In this case, not the entire loan amount, but just a 2nd Loan in conjunction with their standard 1st Loan.  As an example, a buyer may get financing for 70% of the Purchase Price, then agree to a loan with the seller for another 10% of the Purchase Price.  This totals 80% leaving the buyer the remaining 20% as a down payment.

What are the advantages?

**Advantages to the buyer – Potentially lower overall financing costs by lowering the amount owed on a traditional 1st.  Potentially even avoiding things like MI or higher rates due to higher LTVs.  Possibly even increasing Purchase Power
**Advantages to the Seller – More Purchase Power to the buyer could mean more money to the Seller.  Of course, it can be argued that a home is only worth what it’s worth.  However, that formula changes as demand and easy of borrowing do.  So, in the case that your home may be easier or less expensive to buy because you are offering a Seller Carried 2nd, then could it not be true that your home may become more attractive to buyers?

To find out more about strategies for Buying or Selling your home with a Seller Carried 2nd click here to send me a quick email, or my name below to call me directly.

Jeremy Beck | Mortgage Planner | Purchase Power Grower
Direct 858-863-0262