Seller Financing

Dated: 10/12/2017

Views: 543

Sometimes when we want something really bad and being in distress, we make mistakes.  There are many advertisements to buy a cheap house with low payments. Initially you think it is a good deal.  The reality is, often times it isn’t so.



REAL ADVERTISEMENT

Owner Financing

$13,500 Down

Price: $93,500

$1,241 monthly payment

15-year note


Important Points:

  • It is against regulations to advertise financing without an interest rate (APR)

  • Whomever advertises represents the seller

  • How big is the home? Lot? What is included? Is it worth $93,500?

  • Only a licensed real estate agent can inform you if it is worth it because they have the knowledge and access to provide a market analysis

  • When you hire a Realtor, like myself, I will help you find a home that fits your needs and connect you with traditional lenders

  • Being represented by a Realtor is FREE to you as a buyer.  Normally a seller pays buyer's agent. 


Exceptions:

Traditional Lenders will approve loans for people with ITIN and a social.  Depending on the loan program, lenders require a reasonable credit score, closing costs and/or down payment.  Perhaps you have terrible credit or little to no money to buy.  The desire to purchase a home is greater than your financial position.  In that circumstance, you may accept seller’s terms. 



Examples of Terms that Seller May Place:

  • Less stringent qualifying requirements

  • Less down payment requirements

  • The closing process is faster and cheaper

  • Seller will not want to risk waiting 30 years for you to pay, so they will make it a balloon payment due in maybe 5 years.  As time progresses the payment increases and could be double.  Sellers do this in hopes you refinance before then and pay them.

  • Interest rate is higher than a traditional lender

  • Land Contract and Contract for Deed title does not pass to buyer until final payment.  What you receive is called an “equitable title”.

  • If you stop making payments, seller can get the house back and keep the down payment and any money that was paid

  • In the event you decide to sell, seller will place a “due on sale clause” or might keep you liable with new buyers

  • You run the risk if Seller does something to affect the title before you pay it off

  • Contrary, Seller’s mortgage might not be paid off, risk to you if they stop paying and house gets repossessed


Seller Financing

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Marisol Lopez

Marisol Lopez was raised in Chicago from humble beginnings. She grew up in a small apartment in a family of eight. Her parents instilled hard work and perseverance would lead to success. They were v....

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