Seller Financed Mortgage is the most feasible option with increasing population, rising debts and falling credit scores. The concept is very simple, instead of the buyer getting a loan from the bank; the owner finances the buyer’s home loan. Instead of paying to the bank you will pay the seller. Not everyone favours seller finance loans because they charge a higher rate of interest. Then who favours seller financed mortgage? The answer is simple, people who are rejected by banks and lending agencies, because they do not fall into the bank’s loan criteria requirements. Insolvents, defaulters, self employed individuals, migrants etc are few who find it difficult to acquire a loan.

The waiting time is reduced in the seller finance option as the buyer gets loans immediately from the seller. The buyer pays the seller on a monthly basis which goes towards the interest of the loan amount given by the seller. The principle needs to be paid once the term expires. The buyer should arrange for money to clear the principle outstanding to transfer the property to his name. Until then the title remains with the seller. This is to protect the seller from losing the property, in case the buyer defaults. The seller can dispose their property quickly without need for waiting for the right buyer. Though, you cannot term it as a desperate option to sell, buy it can be considered the best option to complete the deal for a good price. Seller finance is beneficial for both buyer and the seller. The seller gets a good deal for the property and the buyer can buy a property without waiting for a bank loan.

Before choosing seller finance option it is best to consult a lawyer and check for terms mentioned in the contract. They can help you complete the deal beneficially. Only a legal expert can brief you of all the hidden clauses in the agreement. There is nothing wrong in spending some money on a solicitor to understand the contract before signing the deal. The seller should treat the buyer, as an owner of the property and not as a tenant any more. The buyer should be given all rights to modify the property as per their taste. The buyer also takes the responsibility of maintaining the property, paying taxes and insurance and also takes care of all repair works. Therefore, the seller should not extend his rights over the property, just because the buyer is paying only on a monthly basis. The buyer should be given all the rights due to an owner, even though the property is yet to be transferred legally.

A strong contract only can help solve difference of opinion between the buyer and the seller. Before getting involved in the deal it is vital to do some research and get help from knowledgeable people. Therefore, both of them should jointly agree to bring in legal help to draft the contract for the seller financed mortgage deal.