Comments on: Loan Term Variations with Seller Financing http://owner-financing.com Owner Financing Primer Sat, 10 Sep 2011 15:04:55 -0400 http://wordpress.org/?v=2.8.4 hourly 1 By: admin http://owner-financing.com/loan-term-variations-with-seller-financing/comment-page-1#comment-1433 admin Thu, 11 Aug 2011 18:32:06 +0000 http://owner-financing.com/wp/?page_id=24#comment-1433 The good and the bad of owner financing is that the buyer and seller can agree to whatever terms, conditions, restrictions they want. Conventional financing is a "one size fits all" kind of deal. That means owner financing provides ways to shift taxes, set payments to meet anticipated events, etc. For example, making the purchase price higher and the interest rate lower will make more of the payments capital gains and less interest income. It is certainly possible to write the kind of agreement you describe. However, I think every conventional loan in the last ten years clearly states that the loan is due on sale. Will they notice? Will they Care? Who knows? What if your buyer wants out of the deal and deliberately tells them? From what I have heard over the years, the change in insurance is what usually notifies them. My understanding is this is not illegal, but it almost certainly violates the loan agreement. You will have to decide if the potential consequences are worth the benefits. You would want to have your attorney check the language carefully, but a short term lease with an option to buy might do what you need with fewer potential issues. The good and the bad of owner financing is that the buyer and seller can agree to whatever terms, conditions, restrictions they want. Conventional financing is a “one size fits all” kind of deal. That means owner financing provides ways to shift taxes, set payments to meet anticipated events, etc. For example, making the purchase price higher and the interest rate lower will make more of the payments capital gains and less interest income.

It is certainly possible to write the kind of agreement you describe. However, I think every conventional loan in the last ten years clearly states that the loan is due on sale. Will they notice? Will they Care? Who knows? What if your buyer wants out of the deal and deliberately tells them? From what I have heard over the years, the change in insurance is what usually notifies them.

My understanding is this is not illegal, but it almost certainly violates the loan agreement. You will have to decide if the potential consequences are worth the benefits. You would want to have your attorney check the language carefully, but a short term lease with an option to buy might do what you need with fewer potential issues.

]]> By: Roby Snow http://owner-financing.com/loan-term-variations-with-seller-financing/comment-page-1#comment-1432 Roby Snow Thu, 11 Aug 2011 17:54:17 +0000 http://owner-financing.com/wp/?page_id=24#comment-1432 Is there an owner financed option where the owner stays on the title and wraps the loan so that he doesn't have to pay off the house first before selling it. Is this advisable.? Is there an owner financed option where the owner stays on the title and wraps the loan so that he doesn’t have to pay off the house first before selling it. Is this advisable.?

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