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Buying A Home, Learn The Facts About Asking The Seller To Carry Financing
- Easier Qualification
Many buyers don’t fit into the rigid requirements necessary to qualify for a conventional mortgage. But this does not mean they are bad credit risks. They may simply have not established credit, they may be divorced, have filed bankruptcy in the past, or be new to the country. Seller financing gives these buyers the chance to purchase the home of their dreams.
Your buyers can help reassure the seller that they’ll receive timely monthly payments by agreeing to contract with an account servicing provider. A good servicing company will keep all the payment and tax records, and handle the transfer of funds as well.
- Flexibility
With seller financing, the terms of the contract are completely negotiable between the two parties. Depending on the relationship, there is often no credit check. The required down payment amount is up for discussion. Or there may be low monthly payments initially, with a larger balloon payment down the road.
- Cost Savings
Loan origination fees can get very expensive. Seller financing eliminates nearly all of these fees, usually saving the buyer from four to ten percent of the total loan price. There also may be savings in mortgage insurance and other closing costs as well.
- Time Savings
Getting approval for a loan, closing a real estate transaction and transferring the necessary fees typically takes a month or more. Seller financing moves fast. The transaction can close as quickly as both parties agree on the terms. This means your buyer gets into their new home sooner and you get your commission faster.
- A Great Way to Create a Solid Financial Base
How do you establish good credit if no one will loan you money? Seller financing gives many buyers that start they need. Whether they’re buying a property from a family member or entering a contract with a willing homeowner, seller financing will help them start building the solid financial base a successful future demands. And by helping them, you’ve made a customer for life.
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