Many people don't realize that seller financing is an option as opposed to utilizing a bank Phoenix mortgage, but there are special rules that you need to know before obtaining this type of financing. About 10% of all home sales in America utiilized some form of seller financing, and there are a few ways that seller financing can help you afford the home of your dreams.
Keep in mind that most Sellers are not interested in financing the home for you, and many would usually take the much lower risk alternative of a bank loan on their Phoenix mortgage. One of the reasons seller financing may occur is if the seller owes a large amount of capital gains taxes, and after they sell the property over time, they are able to reduce the amount of taxes that they will pay.
Sellers may also have a hard time finding qualified buyers especially in a home market that is on the decline, and they may have higher pricing which makes other buyers not so willing to purchase the home, so seller financing is an incentive in order to get them to pay higher rates.
One form of seller financing that can be utilized as a Phoenix mortgage is known as seller carry back, which will allow do as a seller to unload a home utilizing an installment plan, whereby a seller will transfer part of the ownership of a house to you during the closing, and in return they receive a promissory note allowing them to receive scheduled payments on the mortgage. Essentially, a lien is placed on the property until you've fully paid off.
Most seller financing involves a balloon loan, as very few sellers want to offer 30 year financing. Since most people cannot afford to make the entire loan payoff in a few years, they will often take out a traditional mortgage to cover the difference.
Some individuals also use seller financing in order to cover a second mortgage such as if they're using a piggyback loan, which will allow them to save on private mortgage insurance.
So as you can see, seller financing is an ideal alternative for a Phoenix mortgage, and this option can save you great deals of money on your monthly mortgage payments, in addition to being easy to qualify for as opposed to more difficult loans offered by banks. Remember that a seller does not have the same overhead as does a bank. So when shopping for a new Phoenix mortgage, always keep in mind that this alternative exists and that it can often save you gobs of money over the lifetime of your loan.
To discover additional info about Phoenix Mortgage check out my Phoenix Mortgage Rates web site.
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