Second Mortgage Specialists

When possible, get sellers to carry back financing. But if the sellers cannot (or will not) assist with seller financing, turn to a lender who offers second mortgages. Here's what Eagle Mortgage says in a promotional brochure that this company mails to Realtors:

If you knew how to lower the monthly payments on a property purchase for your "A" credit buyers, while helping them build equity faster—would you be interested enough to listen ... what if you could help your marginal "B" and "C" credit customers close the gap between their 60% to 70% loans and the funds they actually have available for their down payment? Our purchase-money seconds offer alternative financing that can provide your buyers with up to a 90% total loan-to-value (LTV) financing. ... With No PMI!

Eagle Mortgage, like hundreds of other lenders, can help reduce the down payment gap and drop your first mortgage balance low enough so that you can avoid buying private mortgage insurance. Sometimes second mortgage lenders will charge you larger loan fees and a higher interest rate than most sellers, but if seller-assisted financing isn't available, locate a reputable mortgage lender who knows how to structure an 80-10-10 or similar piggyback loan (tiered financing). As with other types of financing, the costs and terms of second mortgages adjust along with interest rates, market conditions, and your risk/credit profile. Sometimes such financing looks better than PMI and other times it looks worse. Also, when your mortgage balance decreases and property value increases, lenders permit you to cancel your PMI (Secret #103). But you will pay interest on your second mortgage for as long as it exists. Never follow rate rules. Question and calculate.

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