Did you know…that sellers may provide down payment assistance to buyers and hold a second mortgage? Depending upon the amount of equity that your seller has accumulated, this could be a great option for home buyers and good long-term income for your seller.
These rules apply to both Fannie and Freddie conventional loans.
Seller Second Mortgage Guidelines
- Loan must be at market rate of interest or higher
- Loan cannot balloon in first five years
- Loan must not negatively amortize
- Loan must be legitimate and not “forgivable”
- No prepayment penalty or restrictions
- Buyer qualifies for first & seller-second mortgage
What does it all mean to you?
- Buyer can have as little as 5% down
- Eliminates PMI insurance
- Tax advantages for your buyer
- Lower monthly payment for your buyer
- Income potential for your seller
The Bottom Line: You might be able to sell more houses with this little-used option! Call me for details.