Lets try this in a simlified comprehensible manner for you, You have a property for sale that I am buying from you for 100k. You owe 50k @ 5% interest. on a mortage.. You will take a 10k down payment from me and carry the rest, or 90k @ 10% interest. I make my payment @ # $$$ to you , monthly or as agreed. You pay the paymernt on the loan your paying now @ #$$$ per month. The difference between what you have to pay on the current loan, and what I am paying you is yours. In this case you are making 5% interest on the underlyng loan, and you are making 10% interest on the 40k additional you are due on your loan, plus either an amortized paydown on the 90k, or a 90k balloon at some time in the future as per our contract/agreement. or note/mortage.
The current loan you have stays in place, and you and I have a new note and mortage for the amount of our transaction.
Once the underlying mortage is paid in full of course all the balance is yours.
Hopefully this is understandable for you.
Good luck
[ Edited by ozzie on Date 05/02/2004 ][ Edited by ozzie on Date 05/02/2004 ]
that all makes sense except for the matter of the deed. When the property is sold via owner financing, the deed transfers, correct? Doesn't that underlying mortgage have to be paid off to transfer clear title?
Or can you only do this kind of thing in states that allow bond for deed, contract for deed or land contracts?
Can't do that here in Massachusetts, that's for sure...
Lets try this in a simlified comprehensible manner for you, You have a property for sale that I am buying from you for 100k. You owe 50k @ 5% interest. on a mortage.. You will take a 10k down payment from me and carry the rest, or 90k @ 10% interest. I make my payment @ # $$$ to you , monthly or as agreed. You pay the paymernt on the loan your paying now @ #$$$ per month. The difference between what you have to pay on the current loan, and what I am paying you is yours. In this case you are making 5% interest on the underlyng loan, and you are making 10% interest on the 40k additional you are due on your loan, plus either an amortized paydown on the 90k, or a 90k balloon at some time in the future as per our contract/agreement. or note/mortage.
The current loan you have stays in place, and you and I have a new note and mortage for the amount of our transaction.
Once the underlying mortage is paid in full of course all the balance is yours.
Hopefully this is understandable for you.
Good luck
[ Edited by ozzie on Date 05/02/2004 ][ Edited by ozzie on Date 05/02/2004 ]
that all makes sense except for the matter of the deed. When the property is sold via owner financing, the deed transfers, correct? Doesn't that underlying mortgage have to be paid off to transfer clear title?
Or can you only do this kind of thing in states that allow bond for deed, contract for deed or land contracts?
Can't do that here in Massachusetts, that's for sure...