24 Jun Advantages of High Down Payment for Home Seller and Buyer
Advantages as a Home Seller
As we all know, owner financing does not mean handing out money to the buyer of the house. However, instead, the seller extends a deal to the buyer to cover the purchase of the property minus the downpayment. The buyer will have to make a monthly payment until the loan is paid in full. Both seller and buyer will go into a signed promissory note containing the agreement of the loan.
Eventually, many home sellers do not know that getting high downpayment has an advantage. It opens to different kinds of benefits. And as the seller, you get to experience the following..
- Good investment. You can earn better on the money you used from selling your property than investing in other forms of investments. When you get a good buyer, you can say your loan is in good hands.
- Lump sum cash options. The promissory note you signed together with the buyer can be sold to a financial institution or private note buyer. If you want cash immediately, you can get a good deal out of your note and be paid right away.
- The note sells faster. There is a bigger chance for it to sell faster to any note buyers. Why? Because the note has a high percent down payment. It means that the buyer is stable and has a high chance of finishing the loan without lapses.
Advantages as a Home Buyer
As a buyer, you will also experience many benefits. Most borrowers only go for 3% to 5% down. But if you are interested in financial independence, it might be best to rethink your decision. By deciding to have 20% down payment on the house, you can have those financial independence benefits for you and your family. Find out here..
- Low-interest rate. Having a higher down payment means you are financially stable. The seller might consider to give you a lower rate on your loan when they know you have a good credit score.
- Lower mortgage payment. The bigger the down payment you make, the lower the monthly payment you are going to make to the seller. You will not get stretched out from the monthly budget on your home.
- Finish the loan faster. The goal of every homeowner is to pay off the mortgage as early as possible. This is the most essential benefits every buyer will experience. A mortgage-free home gets more financial independence. You will have many options financially such as travelling with your family because there is no mortgage to worry.