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Another occasional request
is to have the seller "carry back" a second mortgage to help facilitate
your purchase of their home. In cases when the seller does not need all
the proceeds from their sale in order to purchase their next home, this
is an option. The advantage to the buyer is that by combining your down
payment and the second mortgage from the seller, you may be able to avoid
paying mortgage insurance and save yourself some money.
If such a carry-back
is part of your offer, you should include the terms you wish to pay on such
a second mortgage. Keep in mind that your first trust deed lender needs
to know this information so they can underwrite your loan, and they have
certain minimum requirements. The minimum term of the second mortgage can
be five years. The minimum payment can be "interest only." Longer mortgage
terms and payments that also include principle are also acceptable.
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