"'Creative financing' for the most part involves putting people in loans they should not be getting."
Creative financing is one of my specialties, and this statement Is a blatant form of disinformation. It's a blanket statement that's wrong, dubious considering the source (a competitor), and lacking in insight about what creative financing truly is. Creative financing IS one of the oldest forms of financing, has been well documented over hundreds of years (it grew out of bartering), and has been around for much longer than the mortgage brokering business.
Don't get me wrong. I like work with mortgage brokers--especially to help qualify SOME of my potential buyers for deals that I'll flip with creative financing. Plus, those mortgage brokers usually are the ones with whom my buyers will qualify for the refinance.
Not all buyers who purchase with creative financing have messed up credit. Some buyers have 720 or greater credit scores, but might not be able to get another residential loan, because they already have maxed out according to the Fannie Mae or Freddie Mac guidelines. Others who also have 720 or greater credit scores opt to buy with creative financing to avoid dealing with the banks and their draconian rules for qualifying.
Creative financing is a choice. Some sellers choose it to sell their properties for a higher price; others (myself included) choose it because it gives us more options.
Ken, if you're going to put another overpriced listing on the market, then it will rot along with all of the others. Yet, if you price it correctly from the start, then you will sell it. If you're determined to move quickly, then you'll need to be more flexible on your price/terms.
Selling with seller financing is only 1 of many creative ways to sell your property. Another creative way to do it is to swap houses (meaning you'd buy the TH only if the TH seller would buy yours). A third creative way to sell your property--which doesn't involve you carrying back a loan--is to sell via an auction. And the list goes on. . . .
Before checking out this post, I didn't know anything about a swing loan. It sounds like it could be a good deal (provided the terms are reasonable) for the right people. Let's say that you were to put your property on the market and get that swing loan (4.5% interest-only) today, and sold your current property in 6 months. Assuming that the interest rate of the loan on your home is at least 4.5% APR (or higher--most likely), and that the face value (or the original amount that you borrowed) of your loan is $100K, you'd save at least $136.69/month over 6 months (or $820.14 total). Your savings would be greater if the interest rate of loan is greater.
Yes, one could argue that a portion of your payments might have been applied towards the principal in the amortized loan case. Yet, the amount of principal that would have been reduced over 6 months would only be significant had you already paid on this loan for at least 15-20 years. Nearly all of the monthly payment goes towards interest in the first 5 years of an amortized 30-year fixed. Besides, you could take the amount that you saved and apply it towards the balance of your new property.
Please don't misunderstand me. I'm neither encouraging nor discouraging you to/from getting that swing loan. I don't know enough details about your situation to know whether or not it would be a good/bad idea for you. Yet, since most of the other posters commented on the potential cons, I opted to present some of the potential pros for the sake of completeness.
Financing is a tool. In some the hands of some people, it becomes a weapon of mass destruction, and others' hands it becomes a surgeon's scalpel, or a dentist's drill.
Ultimately, you'll need to decide what's more important: the money, the terms, or your time. I know they're all important, but you'll need to prioritize. Afterward, you should sit down with the appropriate professionals to help you design a plan that you'll implement.