As You Go About Looking To Purchase A Home, You May Have Encountered Situations In Which An Option For Seller Financing Presents Itself

Category: Finance, Mortgages.

As you go about looking to purchase a home, you may have encountered situations in which an option for seller financing presents itself.

Because you really do not necessarily understand the ins and outs of seller financing, you may not be able to ascertain whether or not seller financing is the right choice for you. You may not really understand everything that is involved in seller financing. Generally speaking there are two types of seller financing that are utilized in the real estate marketplace today. However, you will need, with that said to closely examine the details of any agreement that you enter into when it comes to a seller financing situation. Again, seller financing may, in some instances prove to be a good option for you when it comes to the purchase of real estate today. You need to examine up close the liabilities you are assuming in a seller financing scheme.

The first type of seller financing that is available in some instances involves instances in which the seller effectively functions as a bank. You need to pay particular attention to what will happen if you default under the terms of the seller financing agreement that you might enter into. Rather than the seller being paid in full at the time of closing through the application of proceeds from a home mortgage loan that you otherwise would have to obtain, the seller effectively loans the balance due and owing on the real estate to you. The seller carries the loan. You will agree with the seller to make monthly payments directly to the seller until the balance due and owing on the real estate is paid off in full. You need to keep in mind that in many of these situations there can be serious and immediate consequences if you ever default on these payments to the seller. The second type of seller related financing is a situation in which the buyer assumes the obligation on the home mortgage loan that the seller already has in place.

You can end up facing a nearly immediate loss of possession of the real estate and you can forfeit any money that you may have paid towards the real estate. Once again, you need to pay attention to the details of any agreement that you have with a seller in a loan assumption situation. Because you are not the holder of the mortgage loan itself, you likely will not have any of the protections afforded to an individual who defaults on a home mortgage loan. You need to keep in mind the dire consequences that can result if you do not make payments under the agreement in a timely manner. In other words, it is likely, if you default that the seller will be able to repossess the real estate in short speed. It is always advisable to consult with a real estate attorney before entering into any such agreements.

You would lose any payments that you had made in such a set of circumstances. If you need the name of a good attorney or have any questions about the Tampa real estate market please don t hesitate to give me a call.