deed and trust for 80/20 loan

[joepar2567]

What is the name of your state?I want to loan my daughter the 20% downpayment on a house she is looking to buy in Colorado.
I want to use a secured prommissary note and a Deed of Trust for my loan to protect my money.

1. Will most lenders accept a 2nd Deed on a property they are the primary(80%) lender for?

2. Should I have the promissary note and Deed executed before the application to the lender is submitted, and then filed together with the primary Deed?

3. Any other suggestions?

 

[fatboyfly]

private money 2nd

As a mortgage banker/broker/wholesaler since 1983, I can answer #1.—Most lenders have 1st lien products that allow private money 2nds. Your daughter just needs to make a few calls to find a lender that will do that. Make sure that she gets an experienced loan officer. There is nothing tricky here, but you both need someone who can watch out for any bumps in the road. Also she needs to make sure the program allows 100% CLTV (combined loan to value.) As for #2—When you say executed, if you mean signed by your daughter, then the answer for most lenders would be no. The lender for the 80% 1st or the Real Estate agent will open escrow. Then you can call the title officer. Tell him/her what you are doing and stay in touch. They will let you know when they want the documents. Usually the lender for the 1st will approve the loan, but then require seeing the note for the 2nd before they draw the documents for the 1st. Then your daughter will sign them all at the same time. Make sure that you have made arrangements to wire the money as soon as you receive the signed documents from title. It is my experience that in almost every case with a private money second that the funding is delayed by the private money. No personal checks, no money orders, not even cashiers checks. Just wire it per the title company’s instructions. The main key here is communication with all parties