|Posted by: Mark Daniels Jun 18 2004, 10:59 AM
I was wondering if it ok to owner finance when a bank holds a lien and first position on the property.
For example I want to purchase a piece of property from a Seller at $100,000. He still owes the bank a portion, let’s say $75,000. Can he still owner finance to me? And, if he does, what happens if he doesnt pay the bank?? How can we structure this deal without using a bank?
|Posted by: loanuniverse Jun 18 2004, 09:49 PM
Owner financing should involve the transfer of title. If this is not done you are pretty much doing a wrap-around mortgage. You can find more information on that by clicking on this link: https://www.loanuniverse.com/2023/12/21/wrap-around-mortgage/
When you buy property, there should be an attorney representing you to make sure that you get everything covered. You should get title, and the seller will be protected by placing a mortgage on it.
How can we structure this deal without using a bank? The seller has to pay the bank from his own funds then. Assuming you are buying this with $0 down. Then the seller pays the lender its $75,000. You sign a promissory note for $100,000 and a mortgage on the property and you get title.