Are you looking for the right office space for your business? Have you spotted the opportunity for an excellent real estate investment? Or are you considering buying some acreage to give your retail store the best possible location?
No matter what the reason, you don’t want to miss out on a great opportunity!
If you can’t currently afford to buy the property you’re interested in or if you don’t want a traditional bank mortgage loan, you may think you’re out of opportunities.
Luckily, with a seller finance loan, this isn’t the case.
Under seller financing, you as the buyer sign a mortgage with the seller/owner and then pay them back in installments over time.
Sound interesting? Read on to learn the most important questions to ask before you enter into a seller loan.
1. “What Kind of Down Payment Do You Require?”
Yes, even with a seller finance loan, you’ll still be expected to make a down payment.
In general, you should expect to pay anywhere from 20-25% of the home’s total value for your down payment, though you may be able to negotiate.
2. “What Interest Rate Will You Charge Me?”
Even though you’ll usually be able to get a more flexible interest rate with seller financing than with a traditional mortgage, you still need to be certain that the rate the seller is offering is both fair and affordable.
Don’t be afraid to negotiate here.
In fact, it may even be a smart move to contact a few banks or lending agencies and ask them about the interest rates they offer as a bargaining chip (even if you suspect they’d turn you down.)
3. “Who Else Will Is Involved in the Process?”
Keep in mind that seller financing usually requires both the buyer and the owner to work with real estate agents, attorneys, and even tax professionals.
These experts will draft a contract, the promissory note, check the buyer’s financial situation, and much more.
Having others involved in the process protects everyone.
4. “What’s Involved In the Application Process?”
As with any other loan, potential buyers will need to fill out an application process.
Often, this means that the owner will run a credit check on you, ask for, request bank statements, and potentially even run a background check on you.
If you’re on the buyer end of the deal, make sure that the property has been both inspected and appraised.
5. “Is the Loan Secured or Unsecured?”
In the vast majority of cases, a seller loan will be secured and the property itself will act as the collateral.
This means that the seller will be able to foreclose on the home should the buyer be unable to make the loan payments.
Is a Seller Finance Loan Your Best Option?
We hope that this post has helped you to decide if a seller finance loan truly is the right loan for you.
But even if it’s not, don’t worry — at Dealstruck, we’ll work hard to find you the lending solution that’s customized to your specific situation.
We work with countless companies in the real estate industry, and we’ll make sure you get a fair loan that will help you to propel your business forward.
Start your application with us today, and learn more about how we help to finance your dreams.