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.
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Penny L. Trumpy - REALTOR® CENTURY 21 Koehler & Associates 2103 Tiffin Avenue
Findlay, OH 45840 419-348-2876 firstname.lastname@example.org
Copyright 2017 Heartland Board of REALTORS®. All rights reserved. Information deemed reliable but is not guaranteed. The data relating to real estate for sale on this web site comes in part from the IDX program of the Heartland Board of REALTORS®. Real estate listings held by brokerage firms other than CENTURY 21 Koehler & Associates are marked with the IDX logo and detailed information about them includes the name of the listing broker. Information provided is for consumer\'s personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. This site will be monitored for \'scraping\' and any use of search facilities of data on the site other than by a consumer looking to purchase real estate, is prohibited. The listing broker has attempted to offer accurate data, but buyers are advised to confirm all items. Information on this website was last updated on 2017-11-21.