These charts will help guide you to safe lending.

When you are thinking of letting someone buy your home either with a real estate broker's help or as a FSBO (For Sale By Owner) and taking back a mortgage you need to think about the risk involved and how to safeguard yourself.

The following forms look very complicated, they really aren't. They are basically just common sense. If someone has bad credit, you will need a bigger down payment from them and will charge a higher interest rate than if they have great credit. But also remember that if you are trying to sell a low-income property almost everyone you talk to will have little or no down payment and possibly bad credit as well.

Determine the credit class of the borrower. This is for the leftmost box. This is a combination of their payment habits shown on their credit report and their FICO score.

FICO is the credit score you will find for the borrower when you review their credit report. Click here to get a credit report on your borrower. Click here for a full explanation of the FICO credit score system.

Loan to Value is the percentage of the loan to the value of the home. Cash down is the actual cash money that the borrower will be paying at closing. So if your house is selling for $100,000 and the buyer puts down $10,000 he has a $90,000 loan and it is a 90% Loan to Value loan. (LTV). The more cash down from the buyer. The safer the loan for you.

As you can see, the greater the cash down, the lower is the LTV and the lower the interest rate in each borrower credit group.

The interest rates below are a guide only. Your licensed real estate professional will help you determine the interest rate. Please bear in mind the advice on the previous page..

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