When you need the down payment money quickly to buy a new house but the funds are trapped in the equity of your existing home, sometimes the best solution is to use an owner occupied hard money second mortgage to make it happen fast.
That’s what this Bay Area homeowner did after writing an offer that was accepted for the purchase of a new home before their existing house (our subject property) had sold. The sellers wanted to close in 30 days, so our borrower client needed to get the down payment funds quickly. Since they were under the gun to perform on the new purchase, the borrower didn’t have time to apply with a bank on a second mortgage or home equity line of credit (HELOC). Taking out the private money second mortgage made the most sense in order to have the necessary down payment funds available for the new purchase.
Owner Occupied Hard Money Second Mortgage Terms:
- $120,000 Loan Amount (65% Combined Loan-To-Value (CLTV) Going Behind the $190,000 First Mortgage)
- 9.75% Interest-Only
- $975/Month Payment
- 20-Year Term
- 3-Month Guaranteed Interest Required
(Trust Deed Investor wanted at least three payments + 1 origination point)