Seller financing is a wonderful alternative to a traditional bank or lender loan when looking to purchase property for sale in Harlingen.
Individuals interested in seller-financed properties will likely want to know what the process is for securing a seller financing agreement. Keep on reading to learn more about what the approval process looks like for seller financing.
Basic Process for Loan Approval in Seller Financing
To start, let’s briefly describe seller financing. Also known as owner financing, seller financing is a loan provided by the seller for the purchase of a property. You can learn more about the benefits of purchasing seller-financed land in one of our recent blogs.
Now that we know the basics of “what” a seller-financed loan is, let us dive deeper into “how” the process works.
- Get third-party help from a real estate agent
A real estate agent or attorney can provide meaningful guidance when developing the promissory note. The promissory note details everything regarding the seller’s loan.
- Establish interest rate
Your interest rate will likely be affected by a number of variables including your down payment and other factors the property owner takes into consideration.
- Establish loan terms
The length of time for a seller-financed loan can vary between the standard years of 5, 10, 15, 20, or 30 years. However, anything in between is possible.
- Determine loan amount
This is dependent on how much the seller is financing for the buyer, minus the down payment provided by said buyer.
- Determine the number of payments
This is simply the number of mortgage payments the buyer will make.
What Happens After the Basic Process Has Been Completed?
The promissory note previously mentioned will be taken to the county office in which the property is located. Once the promissory note is approved, there is a lien placed on the property, which is in favor of the seller of the property. This lien will remain in place throughout the duration of the loan, whether that be 5, 10, 15, 20, or 30 years (or anything in between that ).
Overview of Loan Approval in Seller Financing
To reiterate, the process of loan approval in seller financing:
- Enlist the help of a third party. This will ensure the best results for both parties.
- Determine ALL parameters of the loan, which include but are not limited to: interest rate, length of loan, number of payments, and total loan amount.
- Get the promissory note approved by the county in which the property is located.
- Adhere to the agreement made between the seller, the buyer, and county.
Seller-Financed Property for Sale in Harlingen
If you have questions regarding purchasing seller-financed property for sale in Harlingen, do not hesitate to reach out to the team at SRC Land today. We can help you to find the information you need and get you into the property of your dreams.
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