What is Seller Financing? Help Buying a Home in Colorado Springs
Seller Financing can help you buy a home
A seller offered to finance me. What does that mean to me?
A.This is one of the options you might consider if you want to buy a home but can’t afford a significant down payment. In a “seller take-back,” the seller holds a second mortgage for you and becomes your lender. You would make your monthly mortgage payments to the seller.
Other ways to buy a home with little down include using local or federal government programs, using a tax refund, and asking a relative or friend for a financial gift. Before you do any of the above, consult a professional REALTOR ® about your options. A REALTOR ® also will provide you with direction and connections to a lender and help you avoid costly traps and pitfalls in the home-buying process.
For more information on down-payment options, ask for my Free Consumer Report “4 Quick Ways To Buy A Home With Little Down.”
4 Important Tips To Avoid Costly Mistakes When Buying A Home:
- Talk with a professional REALTOR® about your down-payment options. Your REALTOR® also will help you get connected to a lender before you start looking at homes. You’ll have more power to negotiate if you get pre-approved, not just pre-qualified for a mortgage.
- Be aware of mortgage fraud. A common one is when a lender suggests inflating the price of a house in order to kick back cash to you for closing costs. Report any scams to your state attorney general’s office.
- Don’t forget to factor in all the other costs you’ll have to pay in addition to the down payment. Examples include points to lower your interest rate, closing costs, homeowner’s insurance, and moving costs. Not factoring in these costs will give you an unrealistic picture on what you can afford.
- Use A BUYER’S REPRESENTATIVE! The seller’s agent does not represent your financial interests. Create a “buyer’s representation” with a REALTOR® so you have someone on your side working to negotiate the best price. This won’t cost you a nickel because it’s paid out of the seller’s commission.