The Buyer's Interest Rate Is A Complex Challenge
The interest rate for your buyer is the output of the "buyer-criteria" evaluation. The buyer's "credit profile" is the first indication of what should be expected for an interest rate.
Remember, each person's situation is unique. So each evaluation is done independently, based on the information obtained during the evaluation process.
There are some basic expectations for the private investor funded mortgages. For example, your buyer can certainly expect to pay an "above market" rate when you provide private funds. After all, you are not the "Bank of America".
While the rates will certainly be above market, they will in no way be usurious. That simply means none of the rates charged is illegal. Not even close.
There are three major indicators of what type of rate to expect:
Your buyer's credit report
The amount of the down payment
The buyer's unique situation
There can not be enough emphasis placed on the value of a significant down payment. The more your buyer has to put down towards the purchase of your property, the better it is for all involved.
This up front financial commitment by your buyer makes it so much easier to provide a lower rate than someone with little or nothing down.
The buyer's "unique situation". This is where it gets really interesting. We all know that bad things happen to good people all the time. Get ready to hear some of everything.
There are many stories in the "naked city". I'm sure you will hear your share. Be sure to listen carefully.
Look At Some Of The ADVANTAGES Of Private Funding Mortgage Interest Rates
The money is available to you now!
Your buyer is encouraged to not buy "too much house"
Mortgage payments are tax deductible
Monthly payments build equity in your home
Improve your credit while building a payment history
A good payment history easily justifies lower rates when refinancing
On-time Interest payments contribute to the "seasoning" of your note
Paying the higher rate short time allows you to move into your home now
You will have fixed housing costs compared to renting
There is no Pre-payment penalty!
NO BANKS NEEDED WHEN YOU SELL OR BUY!!
Disadvantages
The only real disadvantage is the monthly payment will require more of your buyer's monthly cash flow for 12 to 24 months.
I'm not convinced that is really a disadvantage. I see it more as a "forced savings plan".
When your buyer follows our system, refinancing will be almost certain. The real issue at the time will be the existing interest rates. Will they be low enough to justify refinancing at that time or not?
If there is at least a two point spread below your then existing rate, go for it. If not, just wait until the time is right.
You can learn much more detail about how the interest rate is established and all of the other criteria in you own copy of "How To Sell Your Home FAST In Good Or Bad Markets". Get your New and Improved copy now!
|
