RE/MAX TOP REALTY
(713) 518-9274 CELL
Owner-financed homes are generally attractive to individuals with poor credit ... otherwise, they'd be able to obtain a mortgage through traditional means. I assume that this is your situation.
Contrary to common belief, there is generally a large down payment required ... at least 20%. The owner has to protect the investment, since he/she is selling the home to an individual with poor credit. The interest rate is generally about double that of current rates ... in this case, you'd probably be looking at 8% to 9%. The loan itself is amortized over 30 years (i.e., as if you had a typical 30 year mortgage) but after three to five years, the balance must be paid in full ... this is referred to as the "balloon." You would have to obtain a mortgage ... or pay the owner in cash ... at that time. If you still can't get financing, the owner keeps your down payment, and you're out of your home and money.
I do not recommend this type of transaction for anyone. Work on your credit, and accumulate enough cash for a down payment (about 6% to 8% of the sales price for FHA-insured financing, including down payment, closing costs and prepaid items). You'll be there before you know it. I wish you well.
Trend Setter Realty
20% down and 7% interest was our charge, and the buyer pays into an escrow acct for Taxes, and maintains homeowner insurance. 5 year balloon or renegotiate at end of 5 years.
Every seller will have their own set of terms, but this is pretty basic.
I will be happy to assist you, check out my website and send me an e-mail.