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Sunday, January 11, 2009

Why consider seller financing?

I saw a listing today that mentioned owner financing with 20% down and good credit. In this price range the 20% would be about 50,000! And the owner financing interest rate was mentioned as 4.5% - not bad.

I am not a mortgage broker nor do I work for any lender but I do know that interest rates are at historically low rates. I know that housing affordability is the best it has been in about twenty years. There are opportunities for buyers with good credit and money to put down.

Opportunities from lenders, I am told!
I heard some "expert" on Fox News this morning that a credit score of 740+ was required for the very best rates...pretty high!

If someone asks me about owner financing I always recommend they speak with a lender first - maybe a couple or three even. I have heard and read of cases where renters were evicted when the owner was foreclosed even though they had paid the rent. I read of a case where the owner who had "owner financed" a property collected the down payment and the monthly payments for six months. Then his buyers were surprised at the foreclosure. Seems he did not pay his mortgage although they paid theirs!

For these reasons I urge you to consider third party financing first. Owner financing and lease with an option to buy are a couple of other options, if necessary.

Of course this is not an indictment of all owners who hold the paper themselves. However, it is a reason for caution.

Gary Waters, Florida licensed real estate agent, Century 21 Baytree Realty, Rockledge, Florida. Call me if you are considering a move to Brevard County Florida. Your single source for information on Viera, Suntree, Baytree Golf Course, Rockledge and Cocoa Florida homes for sale.

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