5 07, 2018

What Happens When a Buyer Defaults on a Seller-Backed Mortgage?


When a Buyer Defaults on a Mortgage You Hold, What Should You Do? What to do when a buyer defaults? Any decision to offer seller financing involves risk. Buyers do not seek seller financing when their financial situation enables them to secure traditional bank loans. That’s why sellers should: Secure a large down payment on a loan. Set an interest rate that’s higher than what banks can offer. Why? Because buyers who make higher down payments have more skin in the game. That makes a default less likely. Higher interest rates reflect the price a buyer pays for less-than-stellar credit. Even [...]

What Happens When a Buyer Defaults on a Seller-Backed Mortgage?2020-09-25T14:19:40-04:00
1 06, 2018

Lien Positions and Seller Financing Transactions


Everything You Need to Know About Lien Positions and Seller Financing Transactions Have you heard the term “lien position” or “lienholder”? This article sheds light on lien positions and why they’re crucial as you consider seller financing . To understand what a lien position is, let’s start with some background on how a mortgage transaction works. Most people who buy a first home have not saved enough money needed to pay cash for the property. Even if they had, it wouldn’t make much financial sense to sock the entire $200,000 in cash into a home. When interest rates are 4%, and the [...]

Lien Positions and Seller Financing Transactions2020-09-29T16:53:26-04:00
25 05, 2018

Rising Interest Rates and Selling Your Mortgage Note


Do Rising Interest Rates Make Selling Your Note a Better Way to Secure the Cash You Need? During the financial crisis of 2008, the Federal Reserve Bank (the Fed) lowered the federal funds rate. The prime rate – the interest rate banks use to set lending rates for consumers – fell to encourage banks to lend money and spark growth. As the economy improved after 2008, the Fed gradually increased the federal funds rate to as much as 2.4%. (As of April 2020, the effective Federal funds rate is 0.05%.) How Do Rising Rates Affect the Economy? If the Fed raises [...]

Rising Interest Rates and Selling Your Mortgage Note2020-09-29T16:49:17-04:00
18 05, 2018

The History of Seller Financing


The history of seller financing. Most people who want to buy a home start by contacting banks and lenders to apply for a mortgage. It takes considerable due diligence to determine your creditworthiness and the value of the property you want to buy. Once you’re approved, the bank may lend you the money for a home. It’s hard to believe, but this kind of home buying process people didn’t always exist. Imagine living in the early 1900’s, when homes were paid for in full of savings or privately financed with a 50% down payment and a 5-year, variable-rate loan. After 5 [...]

The History of Seller Financing2020-09-25T14:29:26-04:00
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