Typical Seller Financed Mortgage

The typical Seller Financed Mortgage has very few of the below features

  • No appraisal
  • No survey
  • No credit reports on borrower(s)
  • Small or zero down payment
  • Borrowers with bad or poor credit
  • No proof of borrower employment or income
  • Non-standard mortgage and note
  • Interest rate may be below market rate for this type of credit risk borrower
  • Non-institutional lender (of course)
  • No government or billion-dollar company guarantee of payment
  • Sometimes no title insurance

The above are the TRUE reasons why your mortgage isn’t worth as much (percentage-wise) as one originated by your local bank for sale to Fannie Mae or Freddie Mac.

Now add to that the facts that

  • You have an intermediary taking a commission (which is many cases they richly deserve)
  • You don’t have the bargaining power of CitiBank or Nations Bank
  • This may be the only mortgage you will only sell in your life
  • You really don’t understand the mortgage process and unfortunately it may be easy to bamboozle you

Let’s be honest about this, some of these factors are just insurmountable. But what you really need to do right up front is to make your mortgage as similar as you can to those originated by institutional lenders.