Home Selling in Miami>Question Details

Miami Momma, Home Owner in Miami, FL

What is seller financing?

Asked by Miami Momma, Miami, FL Wed May 22, 2013

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5
You pay the seller and not a bank.
Web Reference: http://www.GetSoldOKC.com
0 votes Thank Flag Link Sat May 25, 2013
When part or all of the purchase price, less the buyer's down payment, is carried by the seller, the seller is providing owner financing. It doesn't matter if the property has an existing loan, except to the extent that the existing lender might accelerate the loan upon sale due to an alienation clause. Instead of going to the bank, the buyer gives a financing instrument to the seller as evidence of the loan and makes payments to the seller.
0 votes Thank Flag Link Sat May 25, 2013
This is when the seller in a transaction offers the buyer a loan rather than the buyer obtaining one from a bank. To a seller this is an investment in which the return is guaranteed only by the buyer's credit-worthiness or ability and motivation to pay the mortgage. For a buyer it is often beneficial because he/she may not be able to obtain a loan from a bank. In general the loan is secured by the property being sold. In these cases, the Purchaser will execute a mortgage with agreed terms and conditions (interest rate, due dates, other terms) and will also execute a Note (promise to pay). In the event that the buyer defaults, the property is repossessed or foreclosed on exactly as it would be by a bank.

Iris I Romero
Sky~Land International Realty
0 votes Thank Flag Link Thu May 23, 2013
In seller financing, the seller takes on the role of the lender. Instead of giving cash to the buyer, the seller extends enough credit to the buyer for the purchase price of the home, minus any down payment. The buyer and seller sign a promissory note (which contains the terms of the loan). They record a mortgage (or "deed of trust" in some states) with the local public records authority. Then the buyer pays back the loan over time, typically with interest.
0 votes Thank Flag Link Wed May 22, 2013
Seller financing is a loan provided by the seller of a property . In general the buyer will contribute with a down payment to the seller, and then make monthly payments like in a regular loan during a period of time, at an agreed-upon interest rate, until the loan is repaid. For a buyer it is an advantage because he/she may not be able to obtain conventional loan. Tthe loan is secured by the property being sold. In the event that the buyer defaults, the property is foreclosed on exactly as it would be by a bank.
0 votes Thank Flag Link Wed May 22, 2013
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