Carla WinnieShowing You the Way Home |
An alternative to a non-conforming loan is the use of a land contract, which is allowed in some states. A land contract is an agreement between a buyer and a seller, where the buyer agrees to make periodic payments to the seller. The title to the property only transfers to the land contract buyer on fulfillment of the land contract obligations.
A land contract can be helpful for those who need time to establish or improve their credit rating. There are only small closing costs, and payment can help establish a good mortgage payment record. This can help establish an overall good credit rating, and it is possible for the buyer to later refinance the land contract with a conforming loan.
On the other hand, there are risks associated with land contracts. Land contract purchases are not necessarily recorded in the public record, and there are no guarantees that the seller will be able to transfer a clear title to the buyer upon fulfillment of the land contract. There also is no lender assuring that the purchase price for the property is justified, and no inspection of the property’s condition.
Another alternative to a non-conforming loan is assuming the seller’s mortgage. By assuming a mortgage, if the mortgage is assumable, it is possible to save on closing costs, and may allow you to obtain a favorable interest rate.
Back to Table of Contents©2024, The MLS™ - Combined L.A. Westside MLS (CLAW). All rights reserved.
The information being provided by CSMAR, CRMLS and/or CLAW and/or CRISNet MLS is for the visitor's personal, noncommercial use and may not be used for any purpose other than to identify prospective properties visitor may be interested in purchasing. The data contained herein is copyrighted by CSMAR, CRMLS and/or CLAW, and/or CRISNet MLS and is protected by all applicable copyright laws. Any dissemination of this information is in violation of copyright laws and is strictly prohibited. Any property information referenced on this website comes from the Internet Data Exchange ("IDX") program of CSMAR, CRMLS and/or CLAW and/or CRISNet MLS. All data, including all measurements and calculations of area, is obtained from various sources and has not been, and will not be, verified by broker or MLS. All information should be independently reviewed and verified for accuracy. Properties may or may not be listed by the office/agent presenting the information.
Information last updated on 2024-03-28 13:30:04.