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Answers (4)
- Greg Flowers, "Greg Flowers"
- Contributions:32
I have done several "seller financing" deals lately. This has not been the norm though. The 2 main reasons for the increase in seller financing are due to buyers' poor credit and tight mortgage underwriting guidelines. The combination of these two factors makes funding a real estate transaction a challenge.
In my opinion seller financing is great deal for both the buyer and seller. For sellers
it turns a home into a cash producing asset and just like a mortgage company looks at risk, as the loan gets paid down over time the risk for the seller reduces. If at anytime the buyer defaults on the loan payments, the seller can foreclose and get the home back (pocketing the down payment money and all loan payment up to that point). For the buyer it allows a low cost loan (no points or fees) at a comparable market rate, a quick close and with minimum paperwork.
Of course there are risks on both sides so I would close the transaction with a qualified Realtor, through a title company or hire an Attorney to make sure all disclosures are present.
- Thistles
- Contributions:6
My Father sold a house this way.. The buyers gave him the full amount in cash to pay off the mortgage and he held the mortgage for them for 30 years. This was not however because of poor credit it was more a case of No Credit as they were Russian and had just immergrated during the war.
If a seller is not in a hurry for his money and can accept that you are able to make the payments to him. it is benifical for both parties as you would be paying interest to the owners which would have to b at a higher rate than a bank to make it advantagous to them to wait for their money.
I have my house for sale and have considered this.
[content removed by moderator] But seriously I am thinking of riding the storm out now and refiancing.
If a seller is not in a hurry for his money and can accept that you are able to make the payments to him. it is benifical for both parties as you would be paying interest to the owners which would have to b at a higher rate than a bank to make it advantagous to them to wait for their money.
I have my house for sale and have considered this.
[content removed by moderator] But seriously I am thinking of riding the storm out now and refiancing.
- Katina Geralis, "Katina Geralis"
- Contributions:37
Thank you for your inquiry for 206 Carlisle Dr, Dover, DE 19904. This home has 4 bedrooms & 2.5 baths. I would need to check with the owner of this property to see if that would be something they would consider. I am sorry for your credit situation although many folks these days are in that same situation. Sounds like you have already spoken with a Mortgage Lender. Did they give you any time frame on how long it would take to re-build your credit?
- Winfield Parkins, "teamleaderwin"
- Contributions:50
There are about 2 million aspects to your question.
Contact a real estate attorney or title company (depending on where you live) to make sure everyone knows what they are doing.
Some mortgages forbid the owner from selling the home without paying off the mortgage, so selling to you as an owner finance would put the seller in default.
What will you do if the owner continues to accept your payments, but for whatever reason, he stops paying his mortgage and the mortgage (and property) go into default and foreclosure.
Who takes the IRS deduction for the mortgage interest, you or the person who is named on the mortgage?
If the owner has paid off all mortgages and he owns the property free and clear, some of these concerns won't really matter, but there are still other concerns to consider.
Protect yourself!!!
Contact a real estate attorney or title company (depending on where you live) to make sure everyone knows what they are doing.
Some mortgages forbid the owner from selling the home without paying off the mortgage, so selling to you as an owner finance would put the seller in default.
What will you do if the owner continues to accept your payments, but for whatever reason, he stops paying his mortgage and the mortgage (and property) go into default and foreclosure.
Who takes the IRS deduction for the mortgage interest, you or the person who is named on the mortgage?
If the owner has paid off all mortgages and he owns the property free and clear, some of these concerns won't really matter, but there are still other concerns to consider.
Protect yourself!!!
Can you tell me how it would work with owner financing?
We stopped by the house and my husband and I fell in love with it, even though the work is just beginning. We have poor credit. I was hoping if we could get owner financing we could qualify for the home we have fallen in love with.
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