2nd mortgage offered by seller if appraisal is low?

[Jkgourmet]

Originally Posted by volk2k

I was trying to see if a bank would grant a first mortgage if there was a second mortgage that surpassed the appraised value.

No. You've been told that repeatedly. And you've claimed that the "second mortgage" - your personal loan of $100K - would not be secured by the home, but by some other (supposed) assets.

To the bank, the value of the house is $200K. Period. They don't give a rat's pattooty what you and this (supposed) buyer think it's worth.

I've deleted the rest of your post because it makes no sense, at least, not to me.

My final point is this: If this guy is making as much money as you claim, why doesn't he just pay you $100K in cash and do WTH he wants with the mortgage on the $200K?

[volk2k]

Originally Posted by Jkgourmet

No. You've been told that repeatedly. And you've claimed that the "second mortgage" - your personal loan of $100K - would not be secured by the home, but by some other (supposed) assets.

To the bank, the value of the house is $200K. Period. They don't give a rat's pattooty what you and this (supposed) buyer think it's worth.

I've deleted the rest of your post because it makes no sense, at least, not to me.

My final point is this: If this guy is making as much money as you claim, why doesn't he just pay you $100K in cash and do WTH he wants with the mortgage on the $200K?

I'm sorry that you are not able to comprehend what I'm trying to say.

I acknowledge that a second MORTGAGE secured by the house would probably not fly. I was simply answering the poster's question as to why the original post was written the way it was.

But no one here has answered, and even you have asked:
"IF the buyer's DTI allowed the personal loan (which is NOT secured by the house), why would the bank turn down the mortgage?"

It doesn't matter if the second loan is secured or not, that would just make the seller feel more comfortable since they couldn't secure the loan against the subject home.

And this is not an actual scenario... I haven't claimed it to be such.

People with BILLIONS of dollars still take out mortgages, the opportunity cost of locking $100K into a home in a low interest environment is not very smart in my opinion.... but that's not even the point of this post.

[Jkgourmet]

Originally Posted by volk2k

And this is not an actual scenario... I haven't claimed it to be such.

People with BILLIONS of dollars still take out mortgages, the opportunity cost of locking $100K into a home in a low interest environment is not very smart in my opinion.... but that's not even the point of this post.

I'll agree with you that taking out a mortgage at these low interest rates can be a smart thing to do.

But people with BILLIONS of dollars aren't going to be buying a house for 50% higher than it's appraised value. Unless they somehow got BILLIONS of dollars doing stupid stuff.

Since this is not a real scenario (I'm sure that we all wish you had told us that in the first place), why don't you take it over to the philosophical questions board.

[thelopez2]

Originally Posted by volk2k

What I was trying to say here is that the buyer only wants to put down a total of 20% on a $300K "purchase" price.

20% of the 200K first mortgage would be $40K

I was trying to see if a bank would grant a first mortgage if there was a second mortgage that surpassed the appraised value. So I was just stating that the "2nd mortgage" of $100K would consist of a $20K "downpayment" or cash to seller for an actual loan of $80K

If this transaction were to complete, the seller would cash out $200K from the first mortgage transaction and $20K from the "2nd mortgage" and only have an outstanding loan of $80K.

Technically you are putting $140k down of which $80,000 is borrower money. In addition you are receiving funds related to the sale outside of sales transaction.

Would the seller give you the loan if you didn't buy the property?

[berniekosar19]

Originally Posted by volk2k

I'm sorry that you are not able to comprehend what I'm trying to say.

I acknowledge that a second MORTGAGE secured by the house would probably not fly. I was simply answering the poster's question as to why the original post was written the way it was.

But no one here has answered, and even you have asked:
"IF the buyer's DTI allowed the personal loan (which is NOT secured by the house), why would the bank turn down the mortgage?"

It doesn't matter if the second loan is secured or not, that would just make the seller feel more comfortable since they couldn't secure the loan against the subject home.

And this is not an actual scenario... I haven't claimed it to be such.

People with BILLIONS of dollars still take out mortgages, the opportunity cost of locking $100K into a home in a low interest environment is not very smart in my opinion.... but that's not even the point of this post.

I think you missed the part where I mentioned that a primary reason for the bank not lending is because of the increased risk the borrower would walk away from the property because they now have loans out on the house for far more than the property is worth.