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GaryinNC

Your opinion desired

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I am thinking of making an offer on a listed house. The offer I have in mind is half now, half in five years. I don't want to buy the house myself, just flip the contract to someone who can get a loan. The house should appraise for about the price I'm going to offer. The first mortgage would be for ten years, at about five percent interest(market rate), with a balloon in five years. In five years, there would have been about 22 percent of the purchase price paid on the loan. At the end of five years, refinance, borrow 78 percent of the original purchase price, pay off the existing loan and pay the other half of the purchase price to the seller.

 

The big question I have is: will the bank demand that the buyer make a down payment? If they do, the deal is probably dead because part of the appeal of this deal for the buyer would be a very low down payment(paid to me). Any thoughts would be appreciated.

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The big question I have is: will the bank demand that the buyer make a down payment?

These days, the answer is most likely "yes". Of course, ultimately it will depend upon the borrower and the lender.

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