If you have decided that you don’t want to obtain a traditional home loan for whatever reason, you do have other options of which you may have not been made aware. Often this is the route many people have to follow should they have bad or no credit or perhaps they intend to sell the house before they have paid the mortgage in full. Regardless of what reason is behind the choice to not take out a loan, you should know all of your options inside and out before making a decision. Below are a few less traditional mortgage options you may have not been educated on yet.
Purchase Money Mortgages
This is a mortgage that requires the person who is selling the property to provide financing to the person who is buying the property.One transaction is formed when the buyer executes the mortgage at the same time as the acquisition of the legal title to the property. These types of mortgages are most common when the buyer has little to no credit.
When this mortgage is used, twice the regular monthly payment of the mortgage is required as the principal balance. Regular monthly payments are a huge part obtaining a balloon mortgage. Each mortgage of this type is required to have a stamped or printed legend that states what the principal balance due will be once it has reached maturity.
Assumption of the Seller’s Mortgage
When a home loan is transferred from one person to another all of the responsibility of paying on the loan is transferred as well. This way a better financial deal can be obtained by the person who initially obtained the loan. This kind of loan can get complicated and has many ins and outs depending on the individual situation.
If you have questions about mortgages feel free to call your expert real estate lawyer at Pavithran Law today!