Structuring Owner Financing
Ok so I am financing my first home FHA… my wife and I have moved into a new house and are renting the first one. Is there a way to seller finance a sale of that home or lease purchase it? I need the tutorial on that if someone has the time to explain. Or do I need to refinance conventional to be able to do that?
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- Northern Virginia
Quote from @Kyle Dykes:
Ok so I am financing my first home FHA… my wife and I have moved into a new house and are renting the first one. Is there a way to seller finance a sale of that home or lease purchase it? I need the tutorial on that if someone has the time to explain. Or do I need to refinance conventional to be able to do that?
Are you saying you own a house with FHA financing. You are renting that house out and now look to seller finance when you sell that house.
If you are selling it with an existing mortgage you have two options, sell it subject to the existing mortgage where you stay on the mortgage (NOT RECOMMENDED) or sell it seller financing where they have a down payment large enough to pay off the note.
THis leads me to the main question, why would you want to seller finance the sale ? Reason I ask is lets say you charge 8% interest on that loan. Besides the risk involved in seller financing, that money will be taxed at your ordinary income. If you get the cash from the sale and put it in a CD which has a lot more liquidity or a mutual fund or something else that is taxed at long term capital gain you are gonna be at the same return with liquidity and not the risk of a borrower default. Thus why I asked why you would want to seller finance the home?
