Are there tools available to help make the decision whether to purchase a home via seller finance versus a second home with a traditional mortgage? I'm intending to buy a home for my daughter in college and I'm trying to figure how best to compare the two options. My motivation for doing a seller finance deal is because I already have several mortgages attached to my name for other investments. Seller advertised willingness to do seller finance. I could pay cash but prefer to have available cash on hand. Stupid question, but will I still get a 1099 for interest? Thank you!
Are there tools available to help make the decision whether to purchase a home via seller finance versus a second home with a traditional mortgage? I'm intending to buy a home for my daughter in college and I'm trying to figure how best to compare the two options. My motivation for doing a seller finance deal is because I already have several mortgages attached to my name for other investments. Seller advertised willingness to do seller finance. I could pay cash but prefer to have available cash on hand. Stupid question, but will I still get a 1099 for interest? Thank you!
I would certainly consider a seller financed deal if it was more attractive than what a conventional or DSCR lender can offer. That being said, it's rare a seller will want to hold the note for a full 30 years, so it's good to be prepared with a solid exit strategy to refi or sell the property whenever they want their money back.
Happy to chat and see if I can help you find anything better, depending on what the seller is offering!
@Shelley Rubino in my experience, seller finance deals are often only 2-3 years (based on 25–30-year amort) with a balloon at the end that you look to refi.
Are there tools available to help make the decision whether to purchase a home via seller finance versus a second home with a traditional mortgage? I'm intending to buy a home for my daughter in college and I'm trying to figure how best to compare the two options. My motivation for doing a seller finance deal is because I already have several mortgages attached to my name for other investments. Seller advertised willingness to do seller finance. I could pay cash but prefer to have available cash on hand. Stupid question, but will I still get a 1099 for interest? Thank you!
Hi @Shelley Rubino, welcome to the BP Forum! I'll let others on the forum to opine about the 1099 (though per my quick ChatGPT prompt, it doesn't appear that you'll get a 1099).
Comparing the 2 loan options is easy, but we'll need to know the terms (loan amount, interest rate, amortization schedule, etc.) for each of them.
Seller financing is a great option—no lender fees, more flexibility, and you can negotiate directly with the seller. You wouldn’t receive a 1099 for the interest paid, but you can still deduct it (I’ve bought via seller finance myself).
On the traditional side, if you went conventional, we may be able to offset your existing mortgages with rental income. Another route could be a DSCR loan, which doesn't consider your personal debt to income ratio.
You’ve got a few solid options depending on your goals. I’m a mortgage broker—happy to chat if you want to explore what’s best for your situation!
Are there tools available to help make the decision whether to purchase a home via seller finance versus a second home with a traditional mortgage? I'm intending to buy a home for my daughter in college and I'm trying to figure how best to compare the two options. My motivation for doing a seller finance deal is because I already have several mortgages attached to my name for other investments. Seller advertised willingness to do seller finance. I could pay cash but prefer to have available cash on hand. Stupid question, but will I still get a 1099 for interest? Thank you!
I would certainly consider a seller financed deal if it was more attractive than what a conventional or DSCR lender can offer. That being said, it's rare a seller will want to hold the note for a full 30 years, so it's good to be prepared with a solid exit strategy to refi or sell the property whenever they want their money back.
Happy to chat and see if I can help you find anything better, depending on what the seller is offering!
Are there tools available to help make the decision whether to purchase a home via seller finance versus a second home with a traditional mortgage? I'm intending to buy a home for my daughter in college and I'm trying to figure how best to compare the two options. My motivation for doing a seller finance deal is because I already have several mortgages attached to my name for other investments. Seller advertised willingness to do seller finance. I could pay cash but prefer to have available cash on hand. Stupid question, but will I still get a 1099 for interest? Thank you!
I would certainly consider a seller financed deal if it was more attractive than what a conventional or DSCR lender can offer. That being said, it's rare a seller will want to hold the note for a full 30 years, so it's good to be prepared with a solid exit strategy to refi or sell the property whenever they want their money back.
Happy to chat and see if I can help you find anything better, depending on what the seller is offering!
@Shelley Rubino in my experience, seller finance deals are often only 2-3 years (based on 25–30-year amort) with a balloon at the end that you look to refi.