Make Sure Their Job Checks Out

Category: Finance, Mortgages.

Owner financing can be very profitable, as long as you take steps to keep yourself safe throughout the process.

With all the new laws regarding sex offenders, you could easily find yourself in a bad situation if you sell to one and break the law in doing so. I' d like to show you four ways to both protect your finances and make life a lot easier if you decide to owner- finance your property. (1) Make sure you do a background check on any potential buyers. Background checks can also save you from any potential fraud or con games along the way. It's best to avoid these situations- - and any others- - with a simple background check. And, if your buyer runs a drug lab( such as methylamphetamine) , the government could seize the house and cause all sorts of problems for you. You can find a multitude of background check companies on the Internet.

The average cost is$ 25 to$ 50, depending on how much information you want. Just enter" background check" in the search engine and you should find plenty that can help you. And this simple step could definitely save you a lot more money down the road. (2) Ask for references and check them. And character is important too. Make sure their job checks out. So call a few of the professional and personal contacts as well. After all, you don' t want to require mortgage payments of someone who has a history of not paying bills.

You want to make sure the buyer is trustworthy. (3) In addition to a background check, you must run a credit check. There's no guarantee they' ll change their ways once they have to start paying you. These include Equifax, and TransUnion, Experian. (4) Finally, establish in your contract specific limits on when you will allow pre- payments. You can get a credit check through any of the major credit organizations. If you allow prepayments any time, it makes the amortization very difficult( you can find out more about amortization, including how to build a table, at www. bankrate. com) . It's easiest if you limit it to the note's anniversary.

So I suggest you allow pre- payments one time per year. It will make your calculations much, much easier. But you' ve got to do your homework. Once you' ve taken care to cover your bases, owner financing is a great way to sell your house faster and make more money on it. Otherwise, it could be a major headache.