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Should You Provide Seller Financing?

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By : Mary Deoquino    99 or more times read
When you sell your home, if you wish to; you can offer seller financing. Though when you choose this option, it is vital to keep in mind that you w will not gain any money if the buyer does not pay the money back on the loan. Before you finalize your decision for this option, think about what you are about to do. If you want to offer seller financing, below is the way that you can go about doing so.

Are you still paying on your current mortgage loan?

If you are currently paying the mortgage loan on your home, there are several steps that you have to take, starting with making an agreement between you and the buyer about a reasonable purchase price. During the conversation, make sure that you are aware and inform the buyer of what is left on the loan balance.

Figure out how much of the loan you are willing to finance. You have the choices of financing the total of the loan with the requirement of a down payment or you can opt to only finance part of the loan that will fill the gap between the buyer’s down payment and the total of the loan amount.

For the process to be as concise as possible, it’s advantageous of you to consult a real estate attorney or even an escrow officer to help with the paperwork that is required for the wraparound.

When everything is settled and the sell of the house is complete, make sure that you continue to keep up with the payments of the original loan.

Is your home paid off?

If you are fortunate enough to own your home free and clearly, the below steps should be completed. Of course the first thing that you need to do is make an agreement about the purchase price of the home, but before the process goes any further; you need to ensure that the buyer is pre-qualified. In order to do this, you must get permission to speak to the lender. After you have consent, ask the lender two questions. First, ask about the buyer’s credit rating. Second, find out the interest rate that the lender would provide if the buyer were to go through them. When this process is complete, you can move on to creating an agreement on the interest rate and the length of the loan.

Next, figure the mortgage payments. This can easily be done by using computer programming that will do all the work for you. The interest, principle paid, and the remaining balance will be automatically configured. There should be an official contract made up and both parties will be required to sign the agreement. Included should be the loan amount, the interest rates, and the terms.

An important thing that you should do is open up an escrow account with a title company. If you feel uncomfortable doing this, you can have a real estate attorney to do it for you and handle the paperwork.

When you follow the directions mentioned, you will see that you can offer seller financing and make it beneficial.
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