How does a Minnesota Contract for deed Work?
A contract for deed (sometimes called an installment purchase contract or installment sale agreement or Wrap around mortgage) is a real estate transaction in which the purchase of the property is financed by the seller rather than a third party such as a bank, credit union or other mortgage lender. It is often used when a buyer does not qualify for a conventional mortgage
Instead of purchasing a home with a mortgage, the buyer agrees to directly pay the seller in monthly installments. The buyer is able to occupy the home after the closing of the sale, but the seller still retains legal title to the property. Actual ownership passes to the buyer only after the final payment is made.
Before signing a contract for deed, prospective homebuyers should make sure they fully understand the extent of their obligations under the contract, all of the costs they will be responsible for and the risks they are incurring, including how quickly they can lose the home and all the payments they have made.
Rates vary on each owner or investor who is financing the property.
Investors charge a higher rate due to they usually have a commercial loan on the property and have to charge a higher rate. Where is a home owner may have a fixed 30 year rate that is low or paid off the property and can offer a lower rate.
Contract for deed financing works in all counties in Minnesota and all types of properties.
If you are thinking of buying or selling a property with owner financing you will want to work with an experienced Real Estate Broker . Steve Vennemann of BoardWalk premier realty has been in Real Estate Since 1996. 651-334-8312