How to Get the Lowest Mortgage Rates

Alternative Phoenix Mortgage Financing

Seller financing is a great option for many home buyers, as it comes with much lower interest rates as compared to a traditional home loan.  About 10% of all home sales in America utiilized some form of seller financing, and there are a few ways that seller financing can help you afford the home of your dreams.

Just because a seller wants to sell a home does not always mean that they’re eager to finance it themselves, and sometimes they will be much more willing to simply take the cash. One reason that a seller may want to offer seller financing is if they are retired and want to earn passive income or if they will owe a lot of capital gains tax, which can be lessened by taking smaller distributions over time.

Another reason that sellers will offer financing are because they’re in a declining home market and higher prices will allow them to sell their property easier.  In short, they use it as an incentive in order to get individuals to pay higher premiums or just unload the property.

One form of seller financing that can be utilized as a Phoenix mortgage is known as seller carry back, which will allow do as a seller to unload a home utilizing an installment plan, whereby a seller will transfer part of the ownership of a house to you during the closing, and in

return they receive a promissory note allowing them to receive scheduled payments on the mortgage. Essentially, a lien is placed on the property until you’ve fully paid off.

Most seller financing loans are usually balloon payments, or you’ll have to pay the amount in full after a few years.  Of course, most people don’t do this option and they simply refinance or move away by the time that the balloon payment is due.

Some people will also use this type of financing to help them cover a second mortgage, using this money as a tactic in order to avoid having to pay private mortgage insurance.

When considering seller financing for a Phoenix mortgage, keep in mind that this option is great in order to save you on monthly mortgage payments and these types of loans are much easier to qualify for as opposed to utilizing a traditional lending institution.  Remember that a seller does not have the same overhead as does a bank.  Whenever you decide, keep in mind that seller financing is an option that you should think about when deciding on how you will afford your new Phoenix home loan.

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This entry was posted on Friday, June 19th, 2009 at 12:08 am and is filed under Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.