Can my realestate agent lend me money?
The appraisal didn’t come high enough on the home we are going to purchase. The sellers are not willing to come down and the bank won’t borrow us the full amount. Our realestate agent has offered to lend to us the rest needed at a certain rate for 10 years. Is this legal?
He must disclose this to the vender’s as well as to the bank that is giving you the mortgage legally.Most agent do not do this as a practice.But if the bank will not give that much of a mortgage there is a reason(total debt service ratio,gross debt service ratio are not in line). This means that you probably can not afford the house and after about 6 months you will realize this and your nice agent will get a new listing and also collect interest on your second mortgage as you pay almost entirely interest for the first 3 years.
November 26th, 2009 at 2:21 am
Well any one can lnd you money !!
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November 26th, 2009 at 3:03 am
It’s legal. They will most likely put a lein on your house for the amount you borrow.
Although its legal….. it’s not very ethical for the agent to get that involved.
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November 26th, 2009 at 3:41 am
your biggest problem will be your lender. they might not allow you to have secondary financing. it depends on the loan program they are using. you would need to check with them first. there are ways to do that legally though.
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November 26th, 2009 at 4:18 am
yes it is but if the bank finds out you are doing it you can loss you mortgage. Plus that is like a loan shark, he is really tring to get you to buy the house so he can make some money. If the house is really no apprasing you should not buy it, you will lose money in the long run. You Should ask for a new appraisal. or see about an 107% loan.
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superdavemortgage.com
November 26th, 2009 at 4:25 am
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November 26th, 2009 at 4:55 am
Seems like a conflict of interests.
Keep looking for something you can afford …maybe with a new agent who takes you to homes in your price range instead of homes that you cannot afford.
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November 26th, 2009 at 5:43 am
He must disclose this to the vender’s as well as to the bank that is giving you the mortgage legally.Most agent do not do this as a practice.But if the bank will not give that much of a mortgage there is a reason(total debt service ratio,gross debt service ratio are not in line). This means that you probably can not afford the house and after about 6 months you will realize this and your nice agent will get a new listing and also collect interest on your second mortgage as you pay almost entirely interest for the first 3 years.
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I am a mortgage broker.
November 26th, 2009 at 6:31 am
Probably, but it is also probably not ethical.
Why pay more than it is appraised at?
Tell the sellers you will not pay that and you will go look for another house.
YOU are the buyer, that is YOUR POWER.
You will find a better house, for a better price, that you like even more. I promise. It always happens. There is no shortage of great houses to be sold.
Many
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November 26th, 2009 at 6:53 am
yes it is legal, but what kind the money we are talking about?
if this is less then $5000, it’s OK, if you really like this house, but if it’s more – you better look for different house. this house is simply not worth the money you agree to pay. if the seller will not go down with the price- he will run with the same problem with the new potential buyer. end of the story.
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November 26th, 2009 at 7:25 am
It’s legal for your agent to lend you money, but as others has said it could impact your ability to get the mortgage. You will need to report this loan to the mortgage company, and depending on what the payments are, it could throw off your debt ratio and prevent the mortgage from getting approved. Also, since the housing market is soft right now, you may find that your home depreciates even further over the next couple of years. What if you have to move suddenly? Then you’ll have a house that you paid more for than it’s worth, and then lost even more value. When you go to sell it you’ll suffer a big loss. If the seller isn’t willing to come down on the price, I would look elsewhere. There’s plenty of houses out there, and I guarantee you can find one you like as much or more than this one for a price that is more in line with the value of the home.
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November 26th, 2009 at 7:52 am
It is legal and dumb. What happens at the end of 10 years if you haven’t paid the balance in full – is he going to take your home. It is just another way for him to make more money of the deal. He is going to make 3% on the sales price and they additional amount you are going to be paying intrest payments. Do like everyone else said don’t pay more for the house than it is worth. Are you going to go to a car dealership and offer to pay more for the car than what it is worth? No! Don’t allow yourself to be pressured by anyone to come up with extra money for a house that is over valued. You will only end up regreting it.
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November 26th, 2009 at 8:09 am
As long as your lender is OK with it you can do it.
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Licensed TN REALTOR