Seller financing is especially advantageous to first time home buyers, or to buyers who are having a difficult time getting a conventional loan. It is a good idea for buying Atlanta investment property, as the interest rates are generally lower, and there is no hassling with financial institutions. Sell or refinance anytime without prepayment penalties. We encourage you to build your credit and refinance for an even lower payment. Sellers that do a fair amount of owner financing tend to like to make it more of a standardized process. These sellers of owner financed homes typically will take the current going 30 year fixed rate and put a spread on it.
There are some concerns and objectives that sellers have. For one, sellers want to sell off their property fast and without much trouble. They also want to pay fewer taxes on gains. It is quite possible that in a slow market, Atlanta investment property may remain unsold for years which also prompt sellers to be quite concerned about selling. If the property lingers for too long, owners would have to make mortgage payments on their own or by giving it out on rent. This is where sellers may look at owner financing which is 100% or maybe partner with a buyer for use as investment property.
In the past, some sellers were of the opinion that financing is the buyer\’s lookout and not theirs. But the trend and the understanding on the matter is changing as sellers have started to realize that by using seller financing they can get an advantage against competition in terms of overcoming an important hurdle in selling, namely financing for this fairly large buy. First time home owners or even seasoned investors can purchase a home with hardly any down payment and sellers can often contribute as much as 6% of the price towards closing costs.
Seller financing presents very little, if any, problems. The seller doesn\’t have to pass the rigors of a lending institution, nor does the buyer. Sellers will typically finance 50 to 60 percent – or more – of the selling price, with an interest rate below current bank rates and with a far longer amortization. The terms will usually have scheduled payments similar to conventional loans. Sellers must know when they list their property for sale that the master association for their property must also qualify in order for a buyer to be able to get a loan. The Rules and Regulations, By-Laws, budgets, insurance policies, everything, are subject to review by lending underwriters, so be aware of conditions while exploring investment property.
Another example of seller financing is the seller\’s mortgage is transferred to the buyer and the loan extended is in the seller\’s name. The ownership of the property is transferred to the buyer when the sale deed is signed by the seller. Sellers also would like to avoid huge tax liabilities on their Atlanta investment property and are certainly not keen on waiting for huge periods of time like thirty years or so to get some return on their investment property. All of these needs can be met by means of installment sale rather than a conventional sale.
Clark Walker uses Atlanta GA investment property to fund his property management companies.
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