Seller financing is when a home seller acts as a mortgage lender and extends the home buyer a mortgage loan. Rather than paying the bank or another lender, a home buyer pays the seller directly in seller financing. Seller financing can be risky. Learn how seller financing works here.
A home owner asks about offering seller financing on a home he's selling. He wants to know what's involved in seller financing and who to involve in the transaction. First he needs to assess whether a potential home buyer will make the home mortgage payments and what to do if the buyer later stops making payments. When a seller sells a home with seller financing it's as if the seller becomes a mortgage lender or bank. That means the seller may have to be willing to foreclose in an owner financing situation.
What is the consequence of not meeting a deadline to repay seller financing for a home? In a well-executed seller financing scenario, the buyer and seller sign a promissory note that details the terms of the seller financing. Can the owner who financed the home take it back if the deadline is not met?
An owner financed mortgage is not working for this home buyer. Ilyce suggests that this ThinkGlink reader work with a real estate attorney to understand her current mortgage and then refinance from a conventional lender.
Seller financing mortgages are becoming increasingly popular. Home sellers who are desperate and anxious about selling might want to try seller financing to get their home off the market. Traditionally, seller financing is easier and cheaper than going through a conventional mortgage lender.
A homeowner bought a seller financed home and the seller holds a deed of trust. She would like to transfer the seller financed home to her children, but the seller does not want to transfer the property to them. Ilyce surmises that the seller may be concerned about losing his interest on this investment property and discusses alternative ways of obtaining this property that started with seller financing.
Offering seller financing options could help you sell your home in this difficult market. With seller financing, you lend the buyer the cash he or she needs to purchase your home. While it's easier to go to a bank, going with seller financing will be less expensive for buyer, who can save several thousand dollars in lender fees.
Typically, when you sell your home, and you have a loan, the loan is due on the completion of the sale. The due-on-sale clause on the loan gives the bank the right to call the loan and require you to pay it in full. The bank may not exercise its right to call the loan, but that is a risk you would take if you sold the home on an installment contract basis.
A seller received an offer on a building for sale, but the buyer has asked for seller financing. There are several risks involved in a seller-financed deal because the buyer might not be able to get a loan from a traditional lender. A real estate attorney is essential to ensuring a seller-financed deal goes through safely.
When you're buying property from a family member and don't want to incur a lot of taxes, what can you do? Should the property be put into a trust or should the deed be transferred into the new owners' names? One option is to do a seller financing deal, where you pay your family member as if he or she were a mortgage lender.