Quote:
Originally Posted by Rot 911
Owner financing is a win-win for the seller. Not so much for the buyer. You have to make sure that you have a priority lien on the property and that your lien is recorded. This is a secured credit loan with the credit being the house. They fail to make payments, you have them evicted and you start over. Only downside is the same as that with a renter, takes a while to get them out and they may destroy the property in the meantime.
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You think that foreclosure happens instantly? I would never advise a seller to take back a mortgage, ever. Let the bank take a credit risk. There are too many variables.
Even with a recourse mortgage the risk for the lender is most often too high for comfort. It's one thing if you're a financial institution with a large book of mortgages, where the good stuff balances out the bad (IN THEORY), but if this mortgage is your entire "book"... can you afford to lose this asset? All it takes is the buyer not bothering to pay his insurance premium, house burns down... you're done.
Tread carefully!
Cheers
d.