There are loans of all stripes. Loans for cars, student loans and loans for trips to the beach. Regardless of the type of loan, most loans fall into two categories; revolving and installment. Revolving debt is the debt incurred by using a credit card or line of credit where the loan balance rises and falls as payments and charges are made against the account. An installment loan is a loan with preset payments that gradually pay off the loan over time. In real estate, there's another type of installment loan; a land contract.
A land contract is a loan used to purchase real estate but unlike a mortgage, the borrower does not own the property until the loan is paid in full. For example, a traditional mortgage will show that the buyer purchase the house and financed the purchase with a mortgage from a lender. The lender will have a legal interest in the property just as the buyers do. This interest is in the form of a recorded lien. And the lender will continue to have an interest in the property until the loan is paid off or otherwise retired. In the instance of a mortgage, all buyers will have a legal right to the property in addition to the lender's legal interest.
A land contract on the other hand finances real estate but the buyer has no interest in the property until the loan is paid off. A land contract is often used by private individuals to provide financing to borrowers having difficulty financing a home through conventional means. For instance, the buyers don't have money for a down payment, they can't prove their income or their credit is substandard. A land contract can provide financing to the buyers with an additional layer of protection; none of the equity built over the years belongs to the borrowers- the property belongs to the individual financing the contract.
As a buyer, finding someone to assist in a land contract can be a way to help acquire property and re-establish credit. As a seller, a land contract provides a way to sell and finance real estate with you as the only owner until the loan is ultimately retired.
To learn more about investing in Real Estate, including what to look for in homes, investing in the current economy, and other industry information visit http://propertydirectusa.com. For opportunities to invest visit http://buypd.com.
Article Source: http://EzineArticles.com/?expert=Blair_Poelman
Article Source: http://EzineArticles.com/8142446
A land contract is a loan used to purchase real estate but unlike a mortgage, the borrower does not own the property until the loan is paid in full. For example, a traditional mortgage will show that the buyer purchase the house and financed the purchase with a mortgage from a lender. The lender will have a legal interest in the property just as the buyers do. This interest is in the form of a recorded lien. And the lender will continue to have an interest in the property until the loan is paid off or otherwise retired. In the instance of a mortgage, all buyers will have a legal right to the property in addition to the lender's legal interest.
A land contract on the other hand finances real estate but the buyer has no interest in the property until the loan is paid off. A land contract is often used by private individuals to provide financing to borrowers having difficulty financing a home through conventional means. For instance, the buyers don't have money for a down payment, they can't prove their income or their credit is substandard. A land contract can provide financing to the buyers with an additional layer of protection; none of the equity built over the years belongs to the borrowers- the property belongs to the individual financing the contract.
As a buyer, finding someone to assist in a land contract can be a way to help acquire property and re-establish credit. As a seller, a land contract provides a way to sell and finance real estate with you as the only owner until the loan is ultimately retired.
To learn more about investing in Real Estate, including what to look for in homes, investing in the current economy, and other industry information visit http://propertydirectusa.com. For opportunities to invest visit http://buypd.com.
Article Source: http://EzineArticles.com/?expert=Blair_Poelman
Article Source: http://EzineArticles.com/8142446
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