Seller Financing Nightmares

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Seller Financing Nightmares

Seller Financing Nightmares: What Is Seller Financing?

Before we get into some Seller Financing Nightmares, you first need to know exactly what Seller Financing is.  Seller Financing is a real estate agreement where financing provided by the seller is included in the purchase price.  Normally Seller Financing occurs when the borrower doesn’t have good enough credit or credit history to get a loan on their own.  When Seller Financing occurs, normally a down payment of some sort is given to the seller and then installment payments will be made for a specified amount of time at a defined interest rate.  Normally these loans do not have favorable interest rates as the seller is taking all the risk of the borrower paying the loan without the loan being a conventional or FHA loan.  Since this financing option isn’t regulated, it is in the best interest of the borrower to obtain a written and notarized purchases agreement that clearly states the terms and conditions of the loan they will be getting into.

Seller Financing Nightmares: Horror Stories

For borrowers who are desperate to own a home Seller Financing might seem to be a positive option for obtaining a home, but more times than not it may turn into Seller Financing Nightmares.  First and foremost there needs to have some groundwork laid out and that if a deal seems too good to be true, than more likely than not, it is.  The fact of the matter is Seller Financing Nightmares will happen as the people offering them are normally engaging in predatory lending because they know they can take advantage of a borrower who is desperate to purchase a home.  One of the Seller Financing Nightmares comes in the terms of the eviction process.  Unlike the standard regulated loans that are offered by banks and lending institutions, Seller Financed loans normally don’t have as lenient eviction and foreclosure rules.  The way these loans are structured, you can almost compare them to loans of a Loan Share of Payday Loan company.  In these loans if you miss one payment or are late, you can find yourself evicted without any notice or you could be hit with substantial fees in order to get the loan “current” with the seller financer.

Another reason for Seller Financing Nightmares is by the use of a Land Contract.  A Land Contract is an agreement between a seller and buyer of real property where the seller provides financing to the buyer to purchase the property for an agreed upon price.  However, most people offering these land contracts are in the business of predatory lending as well.  The most profit to the seller’s does not come from the full installment price of the loan, but rather how many times the seller can for one reason or another get as much money out of the borrower and find a way to void the contract and not return the money.  After this happens, the sellers will try to get another victim in which to prey on.  The sellers will constantly try to get as many borrowers as they can in order to get as many payments and fees without ever selling the land to begin with.  As you can see a lot of these contracts are made with no real thought they will be seen to the end.

Seller Financing Nightmares: Conclusion

As you can see, be very leery of Seller Financing as more often than not the deck will be stacked against you and you will be victim of predatory lending.  If going through this avenue for financing is your only option, then reach out to someone in the legal field and at least have them go over the document with you before you decide to sign on the dotted line.  If anything here sounds fishy, you need to walk away before you lose whatever money you have.  More times than not these predators will get every dollar out of you and then find a way to get rid of you!  Before going the Seller Financing route and getting involved with Seller Financing Nightmares, please reach out to me and we can go through steps for you to obtain a mortgage the right way and we can even work on getting your credit in order to do so.  If there is any way we can get you a mortgage, we will, but you need to reach out so we can go over your situation.  Please feel free to reach out to me any time at 888-900-1020, email me at contact@loanconsultants.org, or visit www.loanconsultants.org for more information.

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