We are considering buying a vacation home which is owned outright by the seller. He is offering seller financing and I'm trying to figure out if it might be smart to leverage that in some way, or if we should steer clear. Here are the details:
Purchase Price = $130,000. We have been pre-qualified for more than this.
We have $35,000 in our savings account so we *could* put down 20%, but aren't too thrilled about wiping out our rainy day fund completely.
We are considering just putting 10%, keeping $22,000 in savings and living with PMI for a while. That's a simple option.
I'm wondering, though, if there might be a creative way to utilize seller financing to get us to where we could put 20% down without actually draining our savings account. Maybe we offer $150,000 (although it might not appraise for that which would be a problem), actually put down $30,000, get our mortgage for $120k and no PMI an have the seller reimburse us $20k after the fact. At the end of the day, he gets his $130k, we actually only put down $10k and still have $25k in savings.
Our main goal is to buy this house (which has been on the market 10 months and has dropped in price 2x during that period) in a creative way that doesn't end up draining our savings account. Any creative minds out there with seller-financing experience? This house is in a very slow market where things just aren't selling.