Seller Financing

It means that you are asking them to essentially act to you the same way a lender would. They will carry the note on the house so you dot have to get a loan. They will set price, downpayment amount, interest rate and schedule of payments. So you deal directly with them and pay them - not a mortgage company. Please see this post http://www.deangraziosi.com/node/4037

It means that you are asking the seller to "be the bank". You buy the property and then make payments to the seller for their equity.

Example:

Seller has a house worth 100K. You put 5K and the seller takes back a mortgageg for 95K, 30 year amortization at 5.5%. You then make payments on that loan.

What Dean is REALLY saying is that sellers that own free and clear can be a lot more flexible. (They also may be less motivated- but you never know.)

Hope this helps,

Mark

Now that makes more sense.
I am just so confused!

Your explanation was just wonderful. I will continue to read the book now and hopefully I can get a grasp of all this soon.......

I have made some progress in understanding thanks to you and Anita.
Appreciated.

you have a house for sale for 50K and I want to buy it but my credit wont hold a loan so I ask you to carry the note since you owe nothing on it. You agree and I give you 10K down and pay you 550.00 a month for the property and we file a vendors lien deed or warranty deed as it is now called on the property. That shows that I am now the new owner but you, the original owner are holding alien on it for the amount of purchase. Same as if you were the bank holding the mortgage. Any clearer now>

you have a house for sale for 50K and I want to buy it but my credit wont hold a loan so I ask you to carry the note since you owe nothing on it. You agree and I give you 10K down and pay you 550.00 a month for the property and we file a vendors lien deed or warranty deed as it is now called on the property. That shows that I am now the new owner but you, the original owner are holding alien on it for the amount of purchase. Same as if you were the bank holding the mortgage. Any clearer now>

a property from a seller and the seller carrys the note, WE would file for a warranty deed? which does what? SULLY.

The site you sent me to, where you posted the explanation, really made it clear and reading the 'Real-Life Story'on page 185 helped as well.
Thanks to all.....

Oh, you posted the same thing twice! Just doubly making sure you got through to the new girl eh....lol

Hi sully please read this post for more on types of deeds

http://www.deangraziosi.com/node/3046

The warranty deed transfers ownership of the property from the seller to the buyer.

thanks guys, SULLY., wait? couldn't i just QUIT CLAIM the property to the buyer? because, i thought the QUIT CLAIM, transfers ANY interest that the person has in the property? SULLY.

because they do STILL have an interest. You have not paid for the property so you still have obligations to meet with them such as money.

sully wrote:

thanks guys, SULLY., wait? couldn't i just QUIT CLAIM the property to the buyer? because, i thought the QUIT CLAIM, transfers ANY interest that the person has in the property? SULLY.

Yes.. you could. That is what escrow does. It trades a deed for "compensation" (cash, property, gems, whatever.) But as a buyer you want a warranty deed. It is stronger protection for you in terms of the chain of title.

I have saved that node on Deeds as well and will read it properly as soon as I finish this chapter of the book.
Thanks for your help.

the owner have to have his/her prop free and clear. If they have a mortgage on it, are they able to do owner financing?

If the owner will do owner financing how does it work. What form do they use, where do they get it from. How are they put on the deed (first posistion)?

This is most commonly known as a wrap around mortgage. The underlining bank loan stays on the propert with a new seller financing mortgage created that in effect wraps the bank mortgage.

I read in Dean's book that this can be a bity tricky? Has anyone done this. I would look up the chapter and page for reference here only I left my book in the car and hubby took it to work!...lol

I think it was the wrap around that could go wrong if you were not careful. Was it the one where the bank could find out about the new buyer and call in the mortgage?

WRAPAROUND MORTGAGE: is when the seller already has a 1st mortgage in place and continues to pay on it, then the buyer makes payments(usually a higher payment than the 1st mortgage) to the seller through a 3rd party like a title agency or attorney, who then disperses the money to the lender and any overages would go to the seller, wwwhhhhheeewww, oh, i almost frogot, if the lender finds out, they can call the loan due @ any time(due on sale clause), however, most of the time they will just renegotiate with the new interest holder and keep the loan in place as modified CLASS DISMISSED, SULLY.

One more question on this. I read that you can add a little interest for the seller but in this case it will only be payed to the mortgage so there is no benefit to the seller. Is this right?
And, how much are you going to pay to use an agent to pay the mortgage?
I am guessing you have to know this to make the deal worthwhile.