- RISMedia - http://rismedia.com -
How does the seller determine what rate to provide?
Posted By Freelance On November 24, 2007 @ 9:10 AM In Consumer News and Advice,Financing a Home,Home Buying 101,Home Owner News,How to Sell Your Home | Comments Disabled
The interest rate on a purchase money note is negotiable, as are the other terms in a seller-financed transaction. To get an idea about what to charge, sellers can check with a lender or mortgage broker to determine current rates on mortgage loans, including second mortgages.
Because sellers, unlike conventional lenders, do not charge loan fees or points, seller-financed costs are generally less than those associated with conventional home loans. Interest rates are generally influenced by current Treasury bill and certificate of deposit rates.
Understandably, most sellers are not open to making a loan for a lower return than could be invested at a more profitable rate of return elsewhere. So the interest rates they charge may be higher than those on conventional loans, and the length of the loan shorter, anywhere from five to 15 years.
Article printed from RISMedia: http://rismedia.com
URL to article: http://rismedia.com/2007-11-24/how-does-the-seller-determine-what-rate-to-provide/
Copyright © 2012 RISMedia. All rights reserved.