Do You Know About All Your Mortgage Options?

Even if the seller wants the buyer to provide a credit report, the criteria that a seller has in terms of the buyer’s qualifications are going to be much more flexible when compared with a traditional lender. This is something that may fall in your favor. Of course, it is all going to depend on the individual seller and what they are willing to accept on this front. 

Purchasers may find that they are able to select from a range of different payment options if the seller is willing to offer them. Examples include balloon payments, less-than-interest payments, interest-only loans, and fixed-rate amortization. There are no hard and fast rules, as it all comes down to what is right for both the buyer and the seller. You may even be able to make a mix or match of payments based on what the seller is happy with. Interest rates may remain constant or they could adjust periodically, depending on the needs of the borrower and the discretion of the seller. Ultimately, there is going to be much more flexibility because you are dealing with an individual person rather than an institution. However, there are quicker and simpler options, such as sell my house for cash solutions.

You may also be able to negotiate the down payment. If the seller demands a bigger down payment than what the buyer is able to offer, the seller may be willing to allow the buyer to make lump-sum payments on a periodic basis toward the down payment. Closing costs are often lower as well. The reason for this is because you do not have an institutional lender, which means there are no discount or loan points, nor will there be any fees for administration, processing, or origination, which is something that conventional lenders will tend to charge. In addition to this, because you will not be waiting on a lender for financing, this can mean that you are able to close the sale of the property a lot quicker as well.

Why would a seller consider a purchase money mortgage?

You now know why buyers may be interested in purchase money mortgages but are there any benefits for the seller? A seller could be tempted by a purchase money mortgage because it may give them the ability to list their price at a higher rate. You may also find that you are able to pay lower taxes if you make an installment sale. 

In addition to this, sellers receive spendable income in the form of the payments they receive from the buyer, which will boost their monthly cash flow. Furthermore, you could potentially carry a higher interest rate with this sort of investment when compared with others. Of course, this all depends on the way that you structure the purchase money mortgage and the terms you are willing to accept. 

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