Seller is selling a property for $170T. I believe the house could be appraised for more. Let’s say $195T appraisal for instance. That’s $25T equity. So, what I’m going to do is, get a first mortgage for $170T and the seller will “carry a 2nd” worth $25T in a form of a note, making it $195T total for purchase price. Letting me buy the property with no money down. Then, we’ll just sign a release contract stating that I’ve already paid the $25T–releasing any liens from the property. The seller gets $170 outright, and I get the house with no money down. Do you think this will work?
What is your exit strategy? $25k equity is not a lot in the scenerio you have outlined. It is only 13%. If you sell the house you will be paying between 8 & 10% of the sales price when you factor in all costs (realtor fees, taxes, insurance, title policy etc.)
Wow, thanks for the input.
If you plan on using a conventional lender than what you are attempting to do would be considered loan fraud.
First the 2nd mortgage would need to be recorded. There are Federal task forces that watch for these transasctions as they are defrauding the lender. They will even watch for recorded documents that have short releases.