Owner Financing from the seller's side
Hi all,
My husband and I are in a position to offer our first owner financing deal! School me on any experience you've had as far as terms and conditions go to help us structure a deal where our bases are covered!
The details:
The property is a single family detached dwelling.
We're asking $125k and wanting 10% down. We will most likely not be doing more than 3 of these this year, but would like to comply with Dodd Frank, just in case!
We are thinking of charging 6% in interest and amortizing over 30 years. Do you suggest an incentive for buyers to refi after a set period (say, 2 years) in the form of an ARM that will adjust up after said time?
Logistically, how does this play out for us/buyer? I'm assuming the monthly payment (minus taxes and insurance) will go to us and the buyer is to secure their own insurance and pay taxes themselves as well. Or, do you suggest including taxes in the monthly payment?
Regarding terms of payment: How do you word in your contract payment and default details? We're wanting to protect ourselves as much as possible without being unfair to the buyers.
Any advice is much appreciated! Thank you in advance!!