How does home owner financing work?
I am intend to sell my home and have about $70-$90,000 in equity. I want to finance 10%. How does it work?
I ask one of my realtors. he told me that I must have the 10% in cash or get a equity credit line and give that money to the lenders at the settlement. After settlement, I can use the money paid by buyer to pay for credit line to prevent interest. It sounds weird to me.
What are step I must do in home for sale by owner and and owner financing?
Hi,
I am intend to sell my home and have about $70-$90,000 in equity. I want to finance 10%. How does it work?
I ask one of my realtors. he told me that I must have the 10% in cash or get a equity credit line and give that money to the lenders at the settlement. After settlement, I can use the money paid by buyer to pay for credit line to prevent interest. It sounds weird to me.
Let say I have a house for sale $400,000. I owed 306,000 mortgage. That I would have $94,000 equity. I have a buyer who willput down 10% and ask for 10% financed by owner. So at settlement, I should have $20,000 in cash a and promising note from buyer to pay me $40,000 in 30 years. Is this right? I don’t have cash and other credit line.
What are step I must do in home for sale by owner and with owner financing?
By: powermillionsaving
About the Author:
August 2nd, 2008 at 4:59 pm
Lets say your house sells for 300K(and has a 220K mortgage). Lets say your buyer has 30K for a downpayment.
They get a loan for 240K and get the second loan from you for 30K. The 270K from the buyer is first applied to your mortgage and you would get 50K in cash at closing.
You should have a lawyer draw up and help you with recording the mortgage. The lender for the buyer needs to know the details of your arrangement.