Is there a minimum interest rate that must be charged for a land contract in Michigan?

Asked by mike.lengyel, Detroit, MI Sat Mar 30, 2013

I am purchasing the home from an extended family member and they are willing to go as low as possible on the interest rate but they don't want any legal or tax issues by doing so.

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Jeremy Alexa…, Agent, Detroit, MI
Sat Mar 30, 2013
There is no minimum...only a max of 11%
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Haig Istambo…, Agent, Rochester, MI
Sat Mar 30, 2013
Hello,

"Legally" there is no minimum required by law. But the other side of it is, it should be "fair" for both sides. With the Land Contract's that I have seen, the rates are "USUALLY" between 6 - 10%, but I have seen some higher and some lower.

Also, a decent down payment is usually asked for as well. But the beauty of a Land Contract is that the details are between the buyer and the seller and can be what both of you deem fair.

If I was the owner I personally would not go too low because I could probably make more money investing it in other things, like a Mutual Fund or even selling the home to another person at a market rate for the Land Contract.

But whatever you two can work is between you.

Good Luck,

HAIG
(248) 379-6547
realtorhaig@aol.com
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