IS OWNER FINANCING YOUR HOME IN LOUISIANA RIGHT FOR YOU?
WHAT IS A LOUISIANA BOND FOR DEED? IT’S LIKE BUYING YOUR HOME ON A LAY-AWAY PLAN
One way to utilize owner financing is a Bond for Deed. The Bond for Deed is a type of owner financing where the buyer contracts to purchase property at sometime in the future. The seller retains title to the property until the buyer meets the terms of the Bond for Deed or refinances the property with a new lender in order to purchase it outright. The contract sets a specific sales price, down payment, interest rate, loan amount, late fees, maturity date, and monthly payment which may include insurance premiums and property tax payments. It also sets forth the responsibilities of property maintenance from lawn care to remodeling.
Bonds for Deed are not against the law! In this economy, a lender has little advantage to demand a loan be paid in full before its due date if it is current and consistent with monthly payments coming in like clockwork. Lenders do not want another foreclosure on their books. This type of Louisiana owner financing gives the lender/mortgage holder the option to exercise it’s “due on sale” clause that is recited within the mortgage document.
When investigating the possibility of selling or purchasing property via Bond for Deed, make sure you consult with a Louisiana real estate attorney, real estate notary or title company who is experienced in these transactions. Obtain, in advance, a copy of the Bond for Deed document they use to read in full. This will give you the opportunity to jot down questions you may have about owner financing at your own pace. If no one will sit down with you to discuss this transaction, call me and I will be glad to help you!!
Next week we will explore the purchaser’s responsibilities under a Bond for Deed owner financing contract.
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