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.
