Offlinewhen you do a owner financing deal the interest works out as a yearly percentage right? For example, if I buy a property for 20000 @ 6% interest, the interest would be an annual percentage rate right? So with a 5yr aggreement it would be 1200/ a year interest for a total of $6,000 interest added on to the purchase price, am I right on this?
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Could you ask who is structuring this financing, what his terms are and how the interest is calculated? There is no one set way for owner financing, it's what both parties agree on.
we agreed on a price of 9000 with interest of 6% payable over 5 years and he'll hold interest/payments for 60 days, after that it's 200/ a month with a balloon for any balance after 5 years due, the way I calculated it the 200 a month would pay it off in 5 years with no balance. From what I understand the 6% is an annual percentage rate right? Like when you get a loan from a bank? Basically we agreed on 6% but I just don't know if that's supposed to be a year but I figured it is because that seems off for it to be an extra 540 a month in interest, right or is it supposed to be 6% of the loan amount a month? I have never done this before, that's why I needed help
thanks