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What happens to the second mortgage in a short sale?
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What does Seller Financing mean? What is Lease to Own?
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Question:
What is 'Seller Financing' and a 'Lease Option'?Answer:
Seller Financing - Means that you don't have to get a loan from a bank, so there are no closing costs and no bank qualifying. The way it works is you just come in with your down payment, and then make monthly payments to the seller. Then you refinance at some point in the future when you're ready to qualify for a bank loan.Lease Option - Means that you're not actually buying the house, you're getting an option to buy it at some future point. Also called rent to own. The way it works is you agree on a price and a period of time, and then you have the option to buy the house for that price during that period of time. Until you buy the house, you make monthly rent payments. For an example, let's say that you agreed on a 1 year lease option for a $350,000 price. You put 10% down ($35,000), and you make monthly rent payments of $1500 for one year. At the end of the year, or any time during the year, you can go ahead and purchase the home by paying the balance due, which in this example would be $315,000.
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