Buying A Home With Owner Financing

Interest rate can be whatever you decide on. Go to a lawyer that does owner financing a lot. Saving on funding cost and omissions type stuff.

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Interest rate, that depends on how long of a loan and how much you putting down on it.

You need to have it apprised and also have a complete home inspection.

If the old man passes, his family will get the money.

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Wife and I will be putting 20% down and qualify for the best interest rate possible at 30 years. 30 year rates are around 4% so what is a good number to aim for...3%?
Inspection is happening in the next few days and he recently had an appraisal done. Since the bank is not involved would another appraisal need to be done? When he passes and the financing is passed onto his estate can the loan be called? What if his estate does not want it? I am basically looking for the downsides of doing this.

Make sure you speak with an attorney that is familiar with real estate transactions and does an abstract/title examination to ensure there are no title issues (this would be required if you go through a traditional lender.)

However, you can ask the seller a few questions now which will help identify many of the most common issues that arise.

Are there any open mortgages?
Are there any other encumbrances against the seller or the property? (liens/judgments/etc.)
Is/was he married? If so, status of spouse? Depending on this answer, there may be more questions.

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Are there any open mortgages? Are there any other encumbrances against the seller or the property? (liens/judgments/etc.) Is/was he married? If so, status of spouse? Depending on this answer, there may be more questions.

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No open mortgages
No open encumbrances against the seller or property.
His wife passed away a year ago. His only family is a nephew out of town.

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Exactly lol. The agent is a longtime friend of his and let us know that his only family is a nephew who lives in Baton Rouge. He recently gave two million to his alma maters so he has a lot of money but I have no idea how his estate is setup.

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You can bet someone[heir or entity receiving his estate] will be looking to settle and collect once he passes. I'd just make sure you are ironclad on the length of the loan and cant be forced to settle once he passes

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How was this confirmed? I see it all the time-people do not know (or claim not to know) about judgments/liens against them until I do the title work.

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It hasn't been but for the sake of this thread I assuming that beings he built the home 50 years ago and just donated 2 million dollars to his alma mater he has no open mortgages or encumberances.

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You can bet someone[heir or entity receiving his estate] will be looking to settle and collect once he passes. I'd just make sure you are ironclad on the length of the loan and cant be forced to settle once he passes

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Thats my main concern. As I mentioned earlier, I will have an experienced real estate attorney work out the details and make sure I am not exposed later on to calling the loan or settling. I assume all of that can be written into the contract.

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I am not a lawyer, but you might also talk to an estate attorney if the RE attorney has no experience with them

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Good idea. FIL is a lawyer so I am going to bring him this weekend when we go look through his possessions and discuss the financing. He is planning to have a large estate sale with all of his belongings and antiques but wants us to have first pick and will give us a very discounted price so that they stay in the home. Definitely not going to be a simple process with all of these oddities.

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Good idea. FIL is a lawyer so I am going to bring him this weekend when we go look through his possessions and discuss the financing. He is planning to have a large estate sale with all of his belongings and antiques but wants us to have first pick and will give us a very discounted price so that they stay in the home. Definitely not going to be a simple process with all of these oddities.

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Sounds like you got a good deal going here. Doesnt sound like the guy is out for money, just coming to grips with death and lack of family. Not sure how close you are to him, but would probably be in your favor to get close with him. Hell he might even put you in the will. Talk about how you are going to maintain his house, start a family, etc... Take him out to dinner, etc.. Old folks just love contact

I dunno, if you qualify for 4% and have the 20% cash downpayment, I would not be looking at the owner financing. Call me cautious, but it's a cleaner, neater deal to borrow from a bank and be done with things once you sign on the dotted line.

You say that the seller is in early stages of dementia, by your reckoning. I wouldn't want to enter into any contracts with someone who's competency might be questioned after the fact. Nor would I want him to have any "hold" over me or interest in the property once the sale goes through. If he's holding the mortgage, he may feel entitled to take his sweet old time moving out, or visit the property whenever he wants, or object to the color you've painted the shutters, or that you uprooted Dear Departed Late Wife Martha's beloved rosebushes planted on their 25th anniversary.

Get your loan from the bank, buy his house, move on. If you want to have a relationship with him out of kindness, feel free to do so. But I sure as hell wouldn't want to be owing him money if he's headed for what could be a decade of mental decline. The 1.5% interest you save will not be worth the potential headaches.

Yeah makes a lot of sense. May not be worth the headache for sure. Thanks for input.