| With today's ongoing struggles within the | | | | (Michigan) more in other states and 4. ability to |
| mortgage industry, you will see more seller | | | | set up payroll deductions or direct deposit for |
| financed deals than ever. I will attempt to provide | | | | monthly payments. |
| some details on how to structure a seller financed | | | | You should also be prepared to hold a second |
| note. | | | | mortgage for at least 5% of the total sale. This is |
| Notes are merely a promise to pay a certain | | | | very similar to a regular loan program called a 90 |
| price, for a period of time, and other certain | | | | 5/5 or 90% first mortgage, 5% down payment, |
| conditions surrounding the sale of an asset, | | | | 5% seller second. This is the least you should go, |
| whether a home, car, boat etc. Notes are also | | | | more preferable is an 80/10/10 in which the first |
| called land contracts, deeds of trust and are | | | | mortgage is for 80%, buyer down payment of |
| considered mortgages. | | | | 10% and seller second of 10%. |
| Before entering into a contract, make sure that | | | | Do not create a note or mortgage with the intent |
| you consult an attorney for the proper language, | | | | of quickly selling it for full price, the more |
| because there are several different types on the | | | | seasoned the note is, the more you are likely to |
| Internet. Certain land contracts or deeds of trust | | | | receive if you do sell at a later date. Also note |
| slant either in the favor of the seller or buyer. If | | | | that flips are not generally a good idea either, |
| you are the seller, you certainly want one that | | | | check into this before you use notes as a means |
| slant in your favor. | | | | to flipping houses. |
| Do not sell your home or sign any contracts or | | | | No reasonable person enters into a seller financed |
| deeds of trusts until you properly checkout your | | | | deal with the intention of getting the property |
| buyers credit. When selling on land contract of | | | | back or not needing a lump sum of cash in the |
| deed of trust, you must think like a banker for | | | | future. You must structure your seller financed |
| resale (selling your note) purpose or to protect | | | | note or mortgage in a fashion that protects you, |
| your own interest in the sale. | | | | you assets and your ability to sell your note at a |
| Our own requirements for approving someone for | | | | reasonable price, if needed. |
| a land contract are 1. a minimum credit score of | | | | If you are a realtor, the more you know about |
| 625 (this was just raised due to the mortgage | | | | notes as an alternative to conventional financing, |
| crisis) 2. Employment history 3. Bank or credit | | | | the more homes you are likely to sell, especially if |
| union information, minimum 5% down payment | | | | you dealt in the sub-prime market in the past. |