How are the rates set for seller financing?

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

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Meg Sahdala, Agent, Coral Gables, FL
Wed May 22, 2013
You will negotiate the interest rate with the seller, who usually is far more agreeable to negotiating than a conventional lender. However, keep in mind that sellers probably won't be willing to carry a loan for less return than they would earn if their money were invested in a routine conventional instrument.
2 votes
Allister Lenn, Agent, Orlando, FL
Sat May 25, 2013
I would always use a lawyer and an accountant to check the details of any Owner Financing.

Seller and Buyer's agree to the conditions. Some sellers are using this tool to charge more for the property than they otherwise may. They may be concerned that the property would otherwise not appraise for the price and you can avoid an appraisal.

It is also important to remember that they are also able to foreclose on you if you are not current.

Most owners only offer owner financing for a few years so consider that the interest rates in the market are potentially going to be higher when you refinance at a later date.

Don't rush in to owner financing without contacting an expert.


Allister Lenn
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1 vote
Yanoska Diaz, Agent, Miami, FL
Sat May 25, 2013
All terms and conditions are establish by the Seller. I advice you contract the services of legal counsel to prepare or revise note and mortgage.
0 votes
Mack McCoy, Agent, Seattle, WA
Sat May 25, 2013
In addition - you can count on this: the better the terms, the higher the sales price!
0 votes
Bill Eckler, Agent, Venice, FL
Sat May 25, 2013
Owner financing rates are set by the seller but hopefully determined through negotiations with the buyer. One of the downsides to seller financing is that you can expect to pay above the going public rates.

Good luck,

0 votes
Nereida Figu…, Agent, Miami, FL
Wed May 22, 2013
All depends on Seller and Buyer's agreement. Some with very high interest rate due to is owner's financing. This could happen if the buyer's credit score is too low. If your credit score is good them you can negotiate with the seller in that aspect. Therefore, more than market offer.
0 votes
Sandra Souss, , Miami, FL
Wed May 22, 2013
The rates are negotiated between the two parties in the market. There is not a mandatory rate to establish. Same with the amount of downpayment required and period of the loan and frequency of the payments
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