That they have already paid off.
2007-01-03 12:10:54 · 8 answers · asked by G 2 in Business & Finance ➔ Renting & Real Estate
I've worked in banking and lending for a few years, and see this all the time. The family member would be giving up the opportunity cost of "owner financing" it to someone else, so they have every right to charge interest. It is rare to see an interest free loan to a family member; it is common to see a small discount on the rate from what they would charge a stranger.
2007-01-03 12:24:17 · answer #1 · answered by Anonymous · 0⤊ 0⤋
why not? i would except if it was to any of my children but i know they will insist on paying interest as they know i can use the money. i may give them a discount or lower rate because they are family. but why would you expect differently? you will be paying on time, right? so they will be getting their money little by little which would not be fair if they did not charge you some kind of interest. if they got the whole amount lump sum, they could invest that amount and make a little something out of it. it is not fair for you to ask them not too. they spent many years paying off that property so be fair, sweetie. if you can afford it and you like the house and it is worth it for you, then get it. they may not be charging you a lot for the house to start with. maybe they could have gotten more for the house if they sold it to a stranger.
2007-01-03 16:58:42 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Its strictly business, they paid interest. In most states there is a max for an individual seller it use to be 10%, but with interest as low as it is u should pay no more than 6% and 5.25 would be great, thats what I got with refinancing. You r lucky to have family to buy from it is not always easy qualifying for a home, u wont even have closing cost or a realtor etc. u save a bunch, remember business & family r seperate issues. GOOD LUCK in ur new home!
2007-01-03 12:44:05 · answer #3 · answered by bodacious baby 7 · 0⤊ 1⤋
I don't know that there's a "normal" here...not that many people have family members that can afford to finance a house for them.
If your relatives are particularly affluent and just have tons of cash floating around, it would be nice to have an interest-free mortgage. But, more likely, this represents a significant asset to them. As long as they're not trying to collect unreasonable interest, it don't think it's unreasonable for them to ask for something.
2007-01-03 12:15:42 · answer #4 · answered by David G 5 · 1⤊ 1⤋
Yes, they have to make a profit as well , besides they paid interest on their loan so in order to make a little they should charge you some credit. Its up to them, although they could be nice , they shouldn't be required to.
2007-01-03 12:13:11 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Yeah I think it is. Especially if they are doing self financing. But I wouldn't recommend doing business with family.
2007-01-03 12:14:59 · answer #6 · answered by Slam The Wall 4 · 0⤊ 0⤋
If it's their money, they can do what they please and charge any interest rate they want to. We'd be expected charge and have interest paid in our family.
2007-01-03 12:15:22 · answer #7 · answered by DelK 7 · 0⤊ 0⤋
why should you expect special treatment?i'm sure they had pay it when they bought it.
so,why shouldn't they get it when they sell it?
2007-01-03 12:23:44 · answer #8 · answered by jgmafb 5 · 0⤊ 0⤋