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Posts Tagged ‘Seller’

Now that the days of loose lending are gone, creative seller financing is poised to make a comeback. Home sellers are exploring ways to attract more buyers, rather than let their property languish on the market. Seller financing may provide a lift to home sales, as well as a good opportunity for home buyers. Financing can be a First Mortgage or a Second Mortgage: A first mortgage lien can be offered by the seller if the property is owned free and clear, or the seller has a small existing mortgage that will be paid off at the close of the transaction. A second mortgage can be offered to help a buyer get a first mortgage at 80% loan to value, or less, which makes it easier to qualify, and eliminates the need for mortgage insurance. For home sales with a higher price, seller financing could reduce the loan amount of the first mortgage to the conforming loan limit, which provides the buyer with a lower interest rate, and easier qualifying guidelines than a jumbo loan. A second mortgage Read More

If you are selling your home and your existing mortgage is already paid off, and you don’t require the proceeds of the sale all at once, then you may consider financing the sale yourself. Unlike when investing in a fluctuating market, holding the loan on a mortgage assures you of a predetermined interest rate. Now that banks have started tightening their lending criteria, some prospective homeowners are finding it more difficult to obtaining mortgages and seller financing solves the problem. In addition to the investment benefit, homeowners find that offering to take back the mortgage gives them a sellers advantage in this tight buyers market. Generally, the seller and the buyer come up with a mutually agreeable arrangement that outlines the payment, deposit and payment schedule, without the benefit of bank involvement. Instead of financing the entire mortgage amount, the seller may consider taking a loan on a portion of it. Often times, people want to buy, but the banks Read More