OfflineHi everybody,
Me and a friend of mine have decided to buy a house on foreclosure. The deal seems to be good: the house was bought in 2006 for $635,000, is now for sale by the bank for $350,000, and its value today is arround $550,00.
My friend gives half the money in cash, and I intended to get a mortgage for the rest ($175,000). I have good credit and the bank approved.
But: the bank says that the money my friend gives does not count here, and I have to take the mortgage for the full selling price! And since I need only half of it, the bank wants to see that the rest of the money comes FROM MY POCKET, otherwise - no deal.
Any creative idea how to solve this?
Thanks,
Lagy
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but here is what you do. Go to the bank and open a joint account with your friend and DEPOSIT THE CASH in there.
The demand that title be held in oth your names, the bank cannot tell you whoes name to put on the title, but in case they do, the establish an LLC and sell your friend 1/2 of it.
Anita
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Could they start an LLC together, put the cash in THAT account, and then pay from there, with Lagy as the personal guarantor for the loan portion?
Just curious.
Rina
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I would think that a lender could be found that would lend under these conditions. There is not a second mortgage to cover the down payment. The lender would be in first position, with equity of $375K. There is no risk!
Al
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Thanks Anita, Rina, Al
The joint account or LLC seem to be the right thing to do. But the main problem remains: my friend gives 50% cash and naturally doesn't want to be on the mortgage for my 50%. We can, off course, have a lawyer write the papers for that, but this is a long and expensive task. There must be another (simple) way. Or, search for another lender that will be more creative, as Al suggested.
Thanks, Lagy