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Pros and Cons Of Seller Financing
Seller financing, in which an owner of Greenville NC real estate offers a buyer a mortgage, was almost unheard of over the last decade, when money was readily available and lenders vied aggressively for borrowers with myriad mortgage products. But as lending conditions have since tightened drastically and the housing market has softened, seller financing is emerging as an option for both parties.
Seller financing is just what it sounds like. Instead of getting a lump sum when the sale closes, the seller accepts the buyer’s promissory note covering terms like the loan rate, the years the loan will be in effect, the monthly payment, etc.
In many seller-financed deals, the seller provides only the financing the buyer needs to purchase the Greenivlle NC home. Some sellers require a cash down payment; others will finance the entire purchase. In other cases, the seller provides the buyer with a deal to cover just a down payment, with the buyer using an ordinary mortgage for the bulk of the purchase price. This makes it possible to sell to a buyer who cannot afford the down payment required by an ordinary lender and thus increases the pool of potential purchasers. In addition, some sellers ... more
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