Owner financing rates are negotiable. You can ask an agent to check the current rate on institutional first or second loans with different mortgage brokers and lenders.
In owner financing you do not charge loan fees. The interest rates on owner financing are also influenced by Treasury bill and certificate of deposit rates.
This thing is for sure that you are not going to agree to a rate lower than from the one that you can earn through any other investments. You can refer owner financing section of this site for more detail on the topic.
You can find the applicable fund rates directly form the IRS although it is unlikely that you charge such a low interst. Atleast you can get a reference.
James
SallyBaeil Guest
Posted: Thu May 25, 2006 7:10 pm Post subject:
Does this w/ bad credit I could still quaily for owner finance?
Posted: Thu May 25, 2006 8:58 pm Post subject: RE:
Hi Sally,
It is possible to qualify for owner financing even if the borrower has bad credit. Compared to the banks or mortgage companies which go for a thorough check up of a borrower's credit history, a seller financing the purchase tries to find out the buyer's ability of paying off the loan. The seller is lenient in comparison to the bank or private lenders.
Posted: Thu May 25, 2006 9:00 pm Post subject: RE:
Hi,
You will get more information here on owner financing. I hope that it is going to help.
Thanks,
jerry
Gigi Guest
Posted: Mon Aug 04, 2008 10:24 am Post subject: What happens if the seller becomes bankrupt?
I am planning to buy a lot and the seller wants to finance the lot loan with me for 18 mos for 80%, I will pay the 20%. What if he gets bankrupt and cannot pay the mortgage of the lot and I keep on paying my own part to him.
Posted: Mon Aug 04, 2008 11:44 pm Post subject: RE: seller files bankrupty
Welcome Gigi.
It can be quite a tough situation if the seller files bankruptcy and stops paying for the mortgage he has taken. Once you complete paying the lot loan, you will be the sole owner of the lot. So, chances are that the mortgage company may come after you for the payment. But why do you think the seller will be bankruptcy?
Melinda Guest
Posted: Thu Oct 30, 2008 6:29 pm Post subject: selling land--financing buyer
I am selling some acreage. My buyer has offered to pay 50% of the cost down, and wants me to finance the rest over 12 months. How do I arrive at an appropriate interest rate?
It will be better if you can involve a real estate attorney dealing with owner financing. The lawyer will help you to decide a reasonable interest rate which the buyer will be able to pay and you will also be having some profits.
Thanks.
gato Guest
Posted: Sun Jun 07, 2009 9:34 am Post subject: is this a good deal?
i am the seller, my prospective buyers are unmarried,she with a 743 and the him with zero credit and self employed. Agreed Sale price of the house 170K,(house was listed at 185k) they have offered a down payment of 9500, with a 5 year payoff , interest rate of only 5.5%. House might appraise in todays market at 140K according to my broker, what is your opinion?
thank you
I think your interest rate is low. They will not have the ability to get a rate less than 6.5% with the scenario you just proposed. Plus they will not have PMI with you or closing costs.
mgoravit
