When a seller carries financing what is he doing? Are you assuming his mortgage and does it cost less?

Answer 1

If you assume the seller's mortgage, you have to submit paperwork to the bank to have the original terms of the mortgage put in your name.

If the seller carries financing, they are basically lending you money that they may already have in equity in the house you are buying. They become the lender for all or portion of the cost of your new house.

Answer 2

If I'm reading everything correctly you are not assuming the sellers loan, that would involve you having to qualify for the current mortgage they have. Most home loans are not assumable. I would say the seller is doing what is called a contract for deed, land contract,seller carry, there are numerous names for transactions like the one you are describing. There is nothing wrong with a seller carry as long as you are comfortable with the terms. I can tell you as a lender there are a few things you need to do to protect yourself. You should always pay with a check DO NOT PAY WITH CASH!!!!!!! At some point you may want to refinance the property and pay the seller off if you do that you are going to have to prove you have made your payments on time the ONLY way to do that is to pay with a check. If you pay with cash there is no proof on your part that the payment were made on time. The seller could lie for you and say yea the payments were on time but the lender will need documentation of this by canceled checks. Also you need to contact a title company and record and affidavit of equitable interest at the court house this will place your name on title to the property, which means nothing can be done with with property with out your consent. Hope this helps you out.

Answer 3

seller carried financing is when the seller of a house carries all or a portion of the mortgage. also referred to as "owner financing"
if you are buying a home and considering owner financing i would consider asking for only a "seller held 2nd" you finance most of the mortgage but at a lower loan to value--(meaning not 100% financing) this means that your interest rate with the lender will be lower and you shouldn't have to pay any money at closing.
if you find a good mortgage broker they can usually CREATIVLY finance a seller held 2nd and get you a very good loan.

Answer 4

If the seller is providing financing he is acting in the same manor as a bank. The reason this is appealing to people is because they normally are more lenient on the criteria to lend.
Be careful, some seller financing states if you are one day late they can foreclose, and some even keep a already signed deed in escrow for when you default they automatically have have the home back. Have an attorney look over the documents well.
RE Agent,
Remax

Answer 5

GET a lawyer and get everything in writing and understand it before you give them your money.