More sellers holding mortgages for buyers

Seller financing is making a comeback. Carry-back loans allow sellers to avoid paying large capital gains tax amounts all at once.

Tax in any given tax year is only payable on the amount received from the seller in that year. Mortgage rates are generally higher with seller financing, and it provides a steady monthly income. Having the loan serviced by an agency for a monthly fee makes administration and record-keeping easy.

Buyers can benefit by being able to obtain loans on otherwise non-financeable properties - like older single wide mobile homes or homes that have been built around them and are still classified as trailers and other non-conforming properties like geodesic domes and A Frame homes. Buyers can also save money that would usually be spent on appraisals, fees and points.

If sellers want to cash out, there are companies who will buy the note although it is usually sold at a discounted price.

Country or rural property buyers are most likely to benefit from seller financing.

Copyright(C)Patricia Jackson 2006. All rights reserved.