Owner Will Carry: How to Squeeze Profits Out of Every Deal
John and Jane Doe have arrived back at the model home, accompanied by Harry Hustler, their personal sales representative. With a sigh of satisfaction, they sign the purchase agreement.
In just a few short weeks they will be the proud possessors of a new home. Financing? Not to worry. Harry and his firm will take care of the necessary details.
All John and Jane need do is to sign a few papers at settlement, and their new house is theirs to move into. However……
The above scene is re-enacted hundreds of times a week all across the country. Most of the people who buy houses have little contact with financial institutions. The details of the mortgages and trust deeds are left to escrow companies, attorneys, real estate brokers. Housing consumers have only dim perceptions of the primary and secondary mortgage market. They don’t really understand the effects of disintermediation on their qualifying for a new long term mortgage loan.
Many times, especially when mortgage money is “tight”, they are outraged at being disqualified for a loan; or at being required to pay as much as 25% down; or at having to pay 7 “points” at closing when the original application specified 3 points; or at having the interest rate jump a full percentage point, with the loan pay-back term being reduced to 25 years.Read more
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