Does this seem fair for owner financing (on a house)? Or is the guy trying to make a few bucks?
Jun 09, 2009 in
Questions And Answers
My fiance and I have plenty of $ for a down payment on a house, but can not obtain a mortgage. A seller is offering financing @ 8%, and after 1/2 of it is paid (30k) he will give us a deed for trust. If we fall behind and don't pay for 30 days, he pockets all of the money we have invested and we're evicted. He has offered to pay taxes/insurance and just add it on to our principle.
He said that he has "been doing this all of his life". What do you think?
We would be dealing w/a real estate attorney as well (for the documents).
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One comment
Still reading on June 9, 2009 at 11:15 pm
If you have plenty of dollars for a downpayment, and you can't get credit, it sounds like you've had credit problems in the past. This guy is looking for that to happen here.
There are two ways to buy with owner financing. One is as described above, and this is bad for both of you, but especially you. You have no guarantee that he can ever deliver a clean deed at the end of this transaction. Far better for him to sell you the house, deed it to you, and then take back a mortgage. If you fail to pay, he can foreclose and evict you. You would still lose most of what you've paid, but you have some assurance that he can indeed deliver a cleanr title. When he tells you he's done this all his life, he may mean he's sold and resold the same house over and over.
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