Seller Financing: The Best Way to Get a Mortgage
So how a seller and even a home buyer could take advantage this type of situation? With more than 50 percent of the homes owned in the U.S., seller financing is one of the real estate market that even most real estate agents forget to offer.
Seller financing means the owner will carryback the mortgage for financing the property which is free and clear (there is no more outstanding debt). The owner will be the acting as the bank. The buyer who normally pays the mortgage to the bank will be paying the owner instead.
Buyers used to have easy access of getting low interest rates mortgages. Those glory days are gone. There are big numbers of home buyers who are "cash-challenged" or even their credit are not so impressive either. Seller financing could be a great solution for those types of buyers and also a quick way for home seller to go for a quick sale.
Who are best sources for seller financing?
These are the folks who are mostly retired and would rather receive more retirement income. You could ask your local real estate agent to search the local multiple listing service (MLS) for homes listed with no existing mortgage.
A great benefit for home seller using seller financing is they avail themselves of a great income. They could start earning 7 percent or more instead of parking the cash in a bank or mutual fund earning around 5 percent interest.
Advantages of seller financing
- Above market interest rate
- Quick sale for the home seller
- Minimize the potential state of being a "motivated seller"
- Very safe investment. Even if the buyer defaulted and not make the mortgage payment, the seller can foreclose and get paid off at the foreclosure sale by the highest bidder and regain possession of the property to resell for another profit.
- Tax benefit from installment-sale tax benefits. Consult your tax advisor for more detail.
- For the buyer, you avoid paying for all the junk fees that are in the thousand dollars that banks charge for every borrower.
How to convince the seller accept seller financing?
Not every seller with free and clear property out there would entertain seller financing option. They be could hesitant to accept a seller financing due to their lack of understanding and even some novice real estate agent who represent the seller could also add to the matter.
When a seller is hesitant to carry back a mortgage, you could offer some options;
1- Prepay the first six to twelve months of mortgage payments upon closing (this could ease the burden of paying large down payment).
2- Provide post-dated checks each month for the year so the seller can deposit a check on the first day of each month. This is like another security you provide for the seller.
Related Tags: seller financing
Resty Malia is a private real estate investor. He share his simple step-by-step process in buying home foreclosures at http://www.buying-a-home-foreclosures.com.
Your Article Search Directory : Find in ArticlesRecent articles in this category:
- Understand The Fha Guidelines Before Considering Fha Mortgage
The U.S. economy was hit hard by the global financial meltdown. In the housing sector, the crisis is - Basic Facts About Multifamily Apartment Construction Loans
When you make an investment, you surely think of getting something out of it to make the deal profit - Commercial Mortgage Refinance Loan - Ideal Solution For Financial Problems
Financial security is something which we have to plan from before. In life, there is no certainty wh - Free Government Grant Money Eligibility Requirements
All of us hear about free government grant money. But what is involved in obtaining this money? What - Top 10 Tips On Buy To Let Mortgages And Property Hunting
If you are looking for an opportunity to invest your savings or any money you have come into, there - A Few Tips On How To Stop Foreclosure
In case you are facing certain financial catastrophe caused by a loss or relocation of a job, or wha - How To Stop Foreclosure And Lose Your Residence To The Bank
In today's market, there are more and more citizens that get big loans then they use their home as a - Most Excellent Way To Stop Foreclosure - The #1 Blueprint For Saving Your Home
Just what is the best measure to stop foreclosure? No doubt you are browsing for an answer to that q - Act Fast To Stop Foreclosure
If you would like to find out how you can put a stop to foreclosure, there is not much to accomplish - Tips For Buying A Home With No Money
There is a popular belief that you can only buy a home if you have great credit. This is false becau
Most viewed articles in this category:
- Mortgage Refinancing - Rate Caps Protect You When Refinancing With an Adjustable Rate Mortgage
Adjustable Rate Mortgages can save you money when mortgage refinancing if you fully understand how t - 100% Mortgage Loans: What You Need to Know
Coming up with a 20% down payment can be a difficult task for many potential homebuyers. If you are - Home Equity Loan Pitfalls
The home equity loan came of age in 1996 when changes in the tax law eliminated deductions for the i - Mortgage Refinancing: How the Fannie Mae Weekly Yield can Help You Comparison Shop
Mortgage refinancing without knowing Fannie Mae's weekly yield is like buying a used car without kno - How to Pay Off Your Mortgage in 7 Years, Without Extra Payments
One of the most exciting new topics concerning wealth is “How to Pay Off Your Mortgage in - Mortgage Rate Comparison
Trying to get an "apples to apples" mortgage rate comparison can often be quite a hassle. Traditiona - Should I Pay Off My Mortgage Early?
Many people think that real estate debt is good debt. They think that their mortgage is their bigges - Mortgage Refinancing: Beware the Mortgage Vultures
If you are in the process of mortgage refinancing you need to be wary of overpaying for your loan. - Mortage Loans - How Much Does It Actually Cost In The End
Mortgage loans are the loans used to finance most people's first home. It is the big loan that ever - Where To Locate Home Improvement Loan Companies
Where to locate home improvement companies is a question that arises from many different people. Som
