Chap 16: Seller Financing

Question 1

Seller Financing

Answer 1

The seller may agree to do the financing instead of a bank or private lender. In most cases, the seller financing will include a balloon payment 2-5 years after the property sale.

Question 2

How does seller financing Work

Answer 2

Some buyers may have create difficulty obtaining a conventional loan either due to poor credit or job instability.

Unlike traditional lender or bank, seller financing usually is less bureaucratic and involves no or very few costs. It can finish within 5-7 days

One of the major downsides of seller financing is that if the buyer suddenly stops the payment, the seller may incur a heavy loss as well as legal fees.

On the other hand, when the credit market is loose, and the banks are readily lending money even to those people with low credit scores, seller financing usually has low appeal to the home buyers

Question 3

Negatives of Seller Financing

Answer 3

The one major negative for buyers is that they will most likely to pay higher interest rates than if they elected to obtain a mortgage from a bank.