Posted by Randy (SD) on March 15, 2006 at 12:04:44:
If you’re talking about seller financing, it’s very easy to get into… easier to get in than get out.
Suppose you own a property you want to sell offering owner financing, once you have located a buyer simply call your local escrow company ask them to “open escrow” and create the documents for you. These should include the note, deed of trust, HUD -1 settlement statement and a lender’s title policy. They can handle the closing and record the necessary documents.
Now assume this property you are selling has existing financing (underlying mortgage) the note will be a AITD (all inclusive trust deed) otherwise known as a wrap. So your existing mortgage is at 6% interest, your wrap mortgage is at 8% interest, you are making 2% interest on the banks underlying mortgage - can you calculate the yield on that?
If you are considering offering this as a service to the general public DON’T. You must be a licensed mortgage lender and comply with all truth in lending requirements etc. your legal fees will be more than your profit.