**MA****MA**I have carrying costs of about $5000 for a property. Buyers have been unable to obtain a mortgage but are willing to help pay $4000 of my carrying costs...except their budget only permits them to pay $3000. I tell them I'm willing to write a note for the remaining $1000 at closing. They say that they can't do that because it will then be considered debt, which factors into their mortgage application. I'm wondering two options, to skirt the debt load issue: 1) we can agree such that they come to closing with $1000 concession, and if they can't then I carry the note for that amount. Or, 2) we agree to a $35 per diem until closing, and if they can't come up with whatever is the total per diem, then I'll carry a note for them at closing. This way it's not actual 'debt' at the time of mortgage application, all that will become 'debt' on the day of closing, which presumably is after they've obtained the mortgage.
State/Country relating to question: Massachusetts
First, as long as you never file the note, it is not seen as debt by any potential creditor. Just because they write you a promissory note does not mean it appears on their credit and is considered by lenders. It is only if you file that note as a UCC-1 or against the deed of the property that it becomes public and considered as debt. Under MA law, parties are free to contract as they see fit as long as it is not illegal. Thus, either option you prefer or you can insist they sign the promissory note which you will hold and not file and as such is not disclosed to any third parties.
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