QUOTE (Torg @ Oct 22 2007, 04:29 PM) I found a property that a motivated vendor is willing to do a VTB. Puchase price approx $200,000 and he is willing to carry $25,000. It seems that most banks and/or realtors are still uneducated about VTB`s and don`t want them as part of the offer. I have done some VTB`s before but had to put them on another property I had that had enough existing equity. Does anyone have any example of how exactly they write up a VTB on an offer and if anyone else is having the same problems as I am. I was at the Quickstart over the weekend and it seemed that VTB`s are put directly on the offer and the banks still approve it.
Thanks
Mark Torgerson
Hi Mark,
You are correct, there are many banks that do not really understand a vendor takeback and therefore will not allow them. There are however many banks and brokers that do and if it is packaged and presented correctly to the lender, even conventional lenders with fully discounted rates will allow them often up to as high as 90% of the purchase price of the property.
The loan to value that will be allowed with the vendor take back will depend on your application, the location of the property and the lender that you are working with. If there is to be a VTB in place, it is important that is part of the offer as full disclosure in financing is very important and should not cause any challenges or complications if you are working with a lender or mortgage broker that is familiar with the needs and strategies of real estate investors.
Thanks, Rebecca (for Peter Kinch)