Legal? Help Buyer with Downpayment, Mobile Home Sale

[charlienethere]

I have a potential buyer of my mobile home in California atempting to secure financing with a local bank. The mobile home is registered as a vehicle in California (not on property rolls). No land is involved. I'm considering the sale much like that of an automobile/travel trailer. What is the best way to help Buyer with 15% down on a $50k unit? They have 10% to put down, I'd like to offer the remaining 5% ($2,500). Is a cash payment to Buyer with repayment agreement if deal doesn't close legal?

 

[army judge]

I have a potential buyer of my mobile home in California atempting to secure financing with a local bank. The mobile home is registered as a vehicle in California (not on property rolls). No land is involved. I'm considering the sale much like that of an automobile/travel trailer. What is the best way to help Buyer with 15% down on a $50k unit? They have 10% to put down, I'd like to offer the remaining 5% ($2,500). Is a cash payment to Buyer with repayment agreement if deal doesn't close legal?

Why would you want to do that?

This makes the deal look shady.

Why not knock the price down to $40,000?

Then he'd have to only come up with another $1,000 to make 15% of 40 grand.

Your scheme could work, but why are you willing to put yopur money in play?

If the deal does go through, how do you plan to get your $2,500 repaid?

 

[jharris352]

It is perfectly legal, as long as you disclose the source of funds to the lender. If you fail to disclose the source of the down payment funds to the lender you will be in violation of the closing documents which have a disclosure that says there are "no undisclosed financial deals between the parties outside of closing." Failure to disclose this to the lender is or could be mortgage fraud which is very much illegal.

I will tell you ahead of time that the lender will not likely count what you loan or give to them as down payment. Down payment is the difference between what you receive as a Seller and what the Lender contributes to the deal in financing. That difference must come from the Buyer's funds. Otherwise if you provide it you can receive what you provide because it nets itself out. Its like paying yourself from your left pocket to your right pocket. The lender will not count it as money from the Borrower.

 

[charlienethere]

Thank you for what sounds like good advice. God bless you!