What does "Special Financing Available" mean in the Cary area? (real estate)
Raleigh, Durham, Chapel Hill, CaryThe Triangle Area
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When I see a little "Special Financing Available" phrase on a real estate sign, what does that usually mean? I am sure you would have to use their mortgage broker, but does it mean 1/2% off the rate you would have gotten? Or....?
I am selling a condo myself (yes, it's on MLS through a company that does that much and nothing else) and have a great mortgage broker I was thinking of approaching about this. I wanted to have at least a little idea of what I was asking before I did. My guess was that I would steer someone to him and in exchange he would guarantee x% off, but I don't know if that's right. And with that agreement I could include "Special Financing Available" on my listing, fliers, etc.
I am also considering seller financing (there is no mortgage) so if you have any seller financing tips, I have a post over in the mortgage thread.
Hi CVAlicia! "Special Financing" can mean many things of course, but often times it means that the seller is planning to pay to buy down the interest rate in some form or fashion. The preferred lender in this situation may or may not also contribute to the situation in some way - maybe by paying some closing costs or something of that nature.
It would cost a fortune to buy down the par interest rate by 1/2 point, so I can't imagine a lender would offer that deal simply in exchange for you steering business their way.
"Special Financing" may also mean that the seller is willing to pay the purchasers closing costs. Interest rates are really low right now, so offering a lower rate isn't as helpful as paying the closing costs for the buyer. Many buyers find themselves stretching for the down payment money, so paying the closing costs for them may mean the difference in making the deal work.
Seller financing can be a beautiful thing for you. Obviously you would want to get a substantial downpayment and thorough credit check for the buyer. I don't know of any place you could get a better rate of return on your money right now, do you?
What I used to have my sellers in the owner financing scenario do was to set up the payments on a fixed 30 year term, with a "balloon" payment due in 5 or 7 years. This way they got all their money at the end of the balloon term.
Sounds like you are motivated and thinking outside the box.
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