What is a mortgage with the purchase of money?

Mortgage for purchasing money is one of the most unconventional types of housing loans in the area of ​​real estate. Known under different names, basically allows the buyer to borrow money from the seller instead of the bank. Although this type of loan is rare, it has several advantages for both sides, if the buyer and the seller are willing to make certain victims.

The mortgage of purchasing money, also known as the financing of the owner or financing of the seller, occurs when the buyer and the seller agree to the conditions where the buyer makes a monthly payment in exchange for ownership. To work, the seller must have enough capital elsewhere to pay off the rest of the mortgage. The resulting situation, unlike the schedule and the conditions of rent or rent a property, except for the buyer assumes the full ownership of the property. One of the main reasons this type of agreement occurs when the buyer cannot ensure the necessary financing from the bank. In this situation the seller is to earn more money for TPayment engagement, as it usually charges a higher interest rate than banks. With patience, the seller can raise much more money by this method than to demand a one -off amount from the buyer through the traditional financing channel.

Another way that a mortgage for buying money is when the seller wants to use the sale as an investment. Unlike renting, the mortgage does not have to worry about maintaining real estate and paying taxes. This type of sales provides a regular revenue current in some cases for 30 years and does not require any further effort.

The more common version of the mortgage for the purchase of money occurs when the buyer is able to provide some bank financing, but not enough to buy supports. In this case, the buyer gives the seller all mortgages on the bank mortgage and then agrees with the conditions for the remaining money to pay the remaining money to the seller. This is complicated for the buyer because they will have to make one payment to the bank and one payment to the seller.

There are several reasons why the mortgage is so rare when buying homes. The biggest reason is that many retailers need the full amount of sale immediately to introduce a deposit for a new property or buy it. The reliability of the mortgage is another problem, because if the buyer could not secure bank financing, the seller might be interested in the ability of the buyer to pay regularly. Another reason is needed patience, because some sellers simply are not interested in receiving small periodic installments of the total amount of money owed.

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