Can a second mortgage note on one house be used as a downpayment on another?
Tuesday, 17. August 2010
When my husband and I sold our home, we took back a 5-year second mortgage for the buyer. Now that we’ve found a home we want to buy, we don’t have enough cash for a down payment, but would like to use the second mortgage as the down payment, and sign it over as a deed of trust with assignment of rents … or something like that. What we’d like to know is whether or not that can be done? Or, if that can’t be done, what kind of transaction can occur that would allow us to us to use that second mortgage as the down payment? I’d appreciate a response from a knowledgeable real estate person, mortgage lender, or other financial/contracts professional. Thank you. jdbnosik
iam972 Says:
Yes. A second mortgage note can be used as a down payment. As a matter of fact, anything of value can be used as a down payment as long as both parties agree. A lot depends on the seller of the home you are buying. If it is an individual that can sell with owner financing they may be flexible enough to take part of the down payment in cash and the other as a note. Be sure to check with local real estate laws in your state. Each state is different. Get a good real estate attorney to represent your interest and draw up the papers. You should be fine.
Red-Hot Redhead Says:
dependson what "mortgage" means oh and "downpayment" i dont understand that