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by Real Estate Guy on September 10th, 2003

Real Estate Guy

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How are the rates set for seller financing?

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  • by Real Estate Guy on September 10th, 2003

    Real Estate Guy

    The interest rate on an owner-carry loan is negotiable. Ask your agent to check with a lender or mortgage broker to determine the current rate on institutional first (or second) loans.

    Seller financing typically costs less than conventional financing because loan fees (points) typically aren't charged. The interest rate on a seller-carry loan will also be influenced by current Treasury bill and certificate of deposit rates. Sellers usually aren't willing to carry a loan for a lower return than they would earn if their money was invested elsewhere.

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