![]() Often, the terms of the contract will call for 5-10 years of regular payments, concluding with a balloon payment for the balance of the mortgage. This eliminates the need for appraisals or other hurdles a lender may insist on for a traditional mortgage.Ī land contract is often viewed as a way to "pay down the purchase price" before obtaining a regular mortgage to buy the property outright. If the buyer defaults, the seller simply retains the property without the need of going through foreclosure.Īlso, because there's no lender involved, the transaction is simply between the buyer and seller, without the involvement of a third party. As long as the seller is willing to go that route, there's little need for extensive credit checks. The main advantage of a land contract is that it's fairly easy to qualify for. Once the debt is paid off, the seller transfers title to the buyer, who then owns the property free and clear. Instead of taking out a mortgage, the buyer agrees to make regular payments directly to the seller, who still retains title to the property. Basically, the seller is financing the purchase instead of going through a mortgage lender. However, they've been making something of a comeback lately as lenders have tightened credit requirements, sending some potential buyers in search of alternative financing.Ī land contract is a fairly simple concept. Land contracts were a popular way of buying a home back in the 1970s and 1980s, but fell out of favor in recent years as creative financing made it easy for almost anyone to qualify for a mortgage. But there are potential risks to be wary of as well. ICB Solutions | NMLS #491986 ( Close ModalĪ land contract can be an appealing option for a potential homebuyer who might have difficulty qualifying for a mortgage loan. Mortgage products are not offered directly on the website and if you are connected to a lender through, specific terms and conditions from that lender will apply. will not charge, seek or accept fees of any kind from you. By submitting your information you agree Mortgage Research Center can provide your information to one of these companies, who will then contact you. For a full list of these companies click here. If you submit your information on this site, one or more of these companies will contact you with additional information regarding your request. ICB Solutions and Mortgage Research Center receive compensation for providing marketing services to a select group of companies involved in helping consumers find, buy or refinance homes. Neither, Mortgage Research Center nor ICB Solutions are endorsed by, sponsored by or affiliated with any government agency. ICB Solutions partners with a private company, Mortgage Research Center, LLC, (nmls # 1907), that provides mortgage information and connects homebuyers with lenders. is a product of ICB Solutions, a division of Neighbors Bank. ![]()
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