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I have never seen this in any financial forums before and wanted high level background that the folks at this forum might know before I pursue further.
I am looking to purchase a home for me to live in the next 6 months. It is my expectation that I will put 10-15% down to keep some of my cash liquid for emergencies and other items. As such I am a fan of going with a 80% mortgage with a primary lender and borrowing 5-10% on a secondary loan at a slightly higher rate to avoid PMI.
My parents have a lot of their IRA portfolio in conservative funds (CDs/Savings, etc.) that have lost a lot of return in the last year. My question is there a way for them to use those funds as a secondary lender instead of another mortgage company. My guess is this is not possible, but quick searches for me haven't yielded much in terms of this scenario. I know they can invest in real estate they don't live in, but I don't know if the paperwork would be such a nightmare that it isn't worth it. I do know they could earn a better rate with a good credit risk in me and I could get a better rate than a bank for this type of mortgage.
Any thoughts? Thanks in advance.
I am looking to purchase a home for me to live in the next 6 months. It is my expectation that I will put 10-15% down to keep some of my cash liquid for emergencies and other items. As such I am a fan of going with a 80% mortgage with a primary lender and borrowing 5-10% on a secondary loan at a slightly higher rate to avoid PMI.
My parents have a lot of their IRA portfolio in conservative funds (CDs/Savings, etc.) that have lost a lot of return in the last year. My question is there a way for them to use those funds as a secondary lender instead of another mortgage company. My guess is this is not possible, but quick searches for me haven't yielded much in terms of this scenario. I know they can invest in real estate they don't live in, but I don't know if the paperwork would be such a nightmare that it isn't worth it. I do know they could earn a better rate with a good credit risk in me and I could get a better rate than a bank for this type of mortgage.
Any thoughts? Thanks in advance.
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