All Topics / Creative Investing / leaving money in the deal….

Viewing 4 posts - 1 through 4 (of 4 total)
  • Profile photo of ToolsTools
    Participant
    @tools
    Join Date: 2003
    Post Count: 363

    Hi guys,
    I have read numerous posts about a vendor leaving money in the deal.How do the mechanics of that work?I am selling a property and the buyer is $10,000 short in funding.If I left $10,000 in,how do I do that,and how do I get it back?

    Thanks
    tools

    Profile photo of MortgagemanMortgageman
    Participant
    @mortgageman
    Join Date: 2004
    Post Count: 164

    Tools,

    You lend them the extra money and secure it by way of a second mortgage. The problem will be in finding a lender to fund your buyer who will allow this as it is a form of vendor finance, which most lenders do not like.

    Mortgageman

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    You will need to talk to your solicitor about this, mortgage documents will have to be drawn up. You need to decide on the term, the method of their loan (IO, PO, PI or a balloon payment etc), and the interest rate.

    I have spoken to a few lenders about this, and they have expressed that they have no problems with it, but I have never see it done with a registered second mortgage (ie the first mortgage holder would have to give their permission for a second mortgage.)

    Terryw
    Discover Home Loans
    Mortgage Broker
    North Sydney
    Click below to email me

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of woodsmanwoodsman
    Member
    @woodsman
    Join Date: 2004
    Post Count: 714

    A caveat could be placed on title to protect your interests (in addition to the contract between yourself and the purchaser), as many banks do not give permission for registered 2nd mortgages.

Viewing 4 posts - 1 through 4 (of 4 total)

You must be logged in to reply to this topic. If you don't have an account, you can register here.