InsaneJournal

Seller Finance And Its Significant Details
Back when I was a kid, I overheard my parents' discussion on house mortgage. They were selling our house and they were deciding on the choice of having it in cash or mortgage. My Mum decided to have it on seller finance rather than the conventional financing process. Since this term was new to me, I asked my Mum what seller finance was and what makes it different from the traditional financing method. She said that in regular financing mortgage, a company or a bank will let you borrow money to buy the house of your dreams, and you can pay in instalments with interest for a certain period of time with the terms and conditions set by the company. Whereas in seller finance mortgage, the owner handles the financing of the home instead of requiring the buyer to go through the process of regular financing.

In seller finance, the buyer can pay on a more affordable instalment basis than would be offered if the deal were financed through the conventional financing sources like a bank, or a lending company, which hassle them with so many requirements and require them to wait for the approval from management, not to mention the much higher interest.

What makes seller finance more convenient is the down payment which is flexible and negotiable. Both parties can agree on the amount and mode of the down payment like the periodic lump-sum payment method. There are advantages in seller finance in terms of lower closing costs normally charged by the banks and lending institutions. In lending institution there are standard fees required such as processing fees, administration fees and assorted miscellaneous fees which will be shouldered by the buyers.

In seller finance the interest rate, the mode of payment, the terms and conditions can be easily agreed on by the buyer and seller. A written agreement is necessary to ensure promptness of payment by the buyer and to clearly specify the foreclosure process which is legally stipulated in the laws of the land.

Risks should be taken into consideration in seller finance. At the time of payment evasion by the buyer, the legal foreclosure process can be applied but this will involve more effort, time, and a lot of expenses on the part of the seller. Another disadvantage is that the seller may not have the skill of a good credit investigator that banks and lending institutions have. If the buyer turns out to be a bad creditor, chances are it may lead into foreclosure.

A disadvantage could also be that the house will not be in a very good condition unlike when it was purchased.

Enjoy the best benefits from seller finance option. Start by learning about it through the link provided.