Case Studies

Case Study 1:

Successful Business Owner
Secures Dream Home

Seller’s Property:

• Home Value: $500,000
• Mortgage Balance: $250,000
• Current Rate: 3%
• Monthly Mortgage Payment: $1,265

Buyer’s Profile:

• Large down payment and great income from a newly started business
• Unable to qualify for traditional financing due to new business

Transaction Details:

• Purchase Price: $500,000
• Down Payment: 20% ($100,000)
• Seller-Financed Loan: $400,000 at a rate of 5%

How It Worked:

1. Seller’s Existing Loan: The seller retained their current mortgage at a 3% interest rate, with a monthly payment of $1,265.
2. New Buyer Loan: A new seller-financed loan was created for the buyer at a 5% interest rate, with a monthly payment of $2,147.
3. Down Payment: The buyer provided a down payment of $100,000 upfront.
4. Monthly Payments: The buyer made monthly payments to the loan servicer, who ensured the seller’s existing mortgage was paid. The seller received the difference of $882 per month as additional income.

Benefits for Seller:

• Sold the home at the full market value of $500,000.
• Received an immediate down payment of $100,000.
• Earned additional monthly income of $882 from the buyer’s payments.

Benefits for Buyer:

• Secured their dream home despite not qualifying for traditional financing.
• Benefited from a reasonable interest rate of 5%.
• Made monthly payments directly to the loan servicer, ensuring a smooth transaction process.

Case Study 2:

Distressed Seller Finds Relief
Through EquityEdge

Seller’s Property:

• Home Value: $1,500,000
• Mortgage Balance: $1,400,000
• Current Rate: 3%
• Monthly Mortgage Payment: $6,008

Seller’s Situation:

• Distressed and struggling to make mortgage payments
• Risk of needing to bring cash to closing, short sale, or foreclosure

Buyer’s Profile:

• Excellent income but only has 15% down payment

Transaction Details:

• Purchase Price: $1,500,000
• Down Payment: 15% ($225,000)
• Seller-Financed Loan: $1,275,000 at 6%

How It Worked:

1. Seller’s Existing Loan: The seller retained their current mortgage at a 3% interest rate, with a monthly payment of $6,008.
2. New Buyer Loan: A new seller-financed loan was created for the buyer at a 6% interest rate, with a monthly payment of $7,644.
3. Down Payment: The buyer provided a down payment of $225,000 upfront.
4. Monthly Payments: The buyer made monthly payments to the loan servicer, who ensured the seller’s existing mortgage was paid. The seller received the difference of $1,636 per month as additional income.

Benefits for Seller:

• Avoided foreclosure, short sale, or bringing cash to closing.
• Sold the home at the full market value of $1,500,000.
• Received an immediate down payment of $225,000.
• Earned additional monthly income of $1,636 from the buyer’s payments.

Benefits for Buyer:

• Acquired a valuable property despite a limited down payment.
• Benefited from a manageable interest rate of 6%.
• Made monthly payments directly to the loan servicer, ensuring a smooth transaction process.