Assumable Mortgage Or Wraparound Needed...Where To Go?
I currently own a property free and clear. Its much nicer than many of the homes in the area and thus it will only appraise for $180,000. I have had 2 contracts fall through, one for $210,000 and one for $218,000, because of the appraisal issue....
I dont want to be in 2nd position so a seller held 2nd is out of the question, and If I am going to seller finance the whole thing and not get any substantial cash up front then I might as well rent the thing out.
I have been reading about wraparound mortgages lately and have been unable to find a lender that will issue one. As I understand them I would be able to take a cashout loan on the home, and then seller finance at a rate slightly higher then what Im paying to the bank. This would allow me access to the capital up-front and would provide a nice income. So, my quesiton....How can I get this done???? and Is there such a thing as a wraparound line of credit??? any help on this matter would be greatly appreciated. Also, a mortgage that is fully assumable would work as well...any ideas????????
Thanks a million
anyone out there got any ideas????????
What is your aversion to being in second position?
I just feel that If I am in 2nd postion and the owner forecloses, I run too substantial of a risk. Am I wrong? The property is being sold for 40K above appraised value already...
Well, here's some of my thoughts.
Why are you trying to sell it for $30-40K OVER appraised value? Appraisers doing a purchase appraisal will do one of two things, get the value up to the sells price OR get the value as HIGH as the market will bear. Since they didn't get to your sales price, then the latter was probably achieved. This means that you're just $40K overpriced for the market.
Wraparounds have nothing to do with a lender. In a wraparound, YOU are the lender to the buyer. And yes, any lender that you actually mention this to will respond negatively. It is very risky to them and it violates the due on sale clause that is within your loan contract with them. I wouldn't recommend trying this at least until you study it enough to actually know what you're doing here.
There is no such thing as an assumable mortgage anymore and I'm not sure how that would help you in this situation anyway.
If you feel that holding a 2nd note is to risky, then holding a wraparound isn't a good idea either, anyway. Your risk on a 2nd note really depends on what you bought the property for in the first place.
The property is being sold for 40K above appraised value already
No, it's not. It's being offered at 40K above appraised value. It's not sold until you get it SOLD.
Roger
TAMPAREI,
The issue of the value of the property still remains, however, there is something you should know about notes.
Think about this. If a lender had no way to "cure" a default on a senior lien, nobody would lend any money. A lender would not lend $200,000 on a property if he could get wiped out by a Tax Sale for $2000 in back taxes.
If you are in second postition and there is a default on the first, you can payoff the defaulted amount to bring the first current and then start foreclosure proceedings on your second. Here in CA we file a notification of default that notifies when a default occurs.