How to set up owner financing. - Posted by Brett

Posted by jason on March 30, 2006 at 08:35:50:

Compound interest on a mortgage would be super! good luck. Mortgages are amortized using simple interest, or interest charged on the unpaid balance. Go to yahoo real estate or something like it to plug in the numbers.

How to set up owner financing. - Posted by Brett

Posted by Brett on March 30, 2006 at 08:13:30:

I know this question is like asking some of you what letter of the alphabet comes after B, but i need some help. Ive been investing for over a year. Im only familiar with doing lease-options, but now I have some deals that i want to sell with owner financing. IM a good investor, i just need help on my math sometimes. Lets say I want to sell a house worth 60,000 for 15 years at current interest rate. How can I figure this up? THis compound interest has not fully setteled in my head yet. Thank you

Re: How to set up owner financing. - Posted by VB

Posted by VB on March 30, 2006 at 14:50:17:

Google “mortgage calculator” or go to or


Re: How to set up owner financing. - Posted by Chris in FL

Posted by Chris in FL on March 30, 2006 at 13:14:10:

Brett, I am pretty good at math, but compound interest amortization is too complicated to figure out in most cases. You need to use an amortization chart, financial calculator, or, what I frequently do, have the title company prepare an amortization schedule for me. Here are a few other tips for people considering owner financing: 1) if possible, set up buyer for EFT (very nice), 2) usually owner finance suggests buyer can not qualify for traditional financing - this means you should get above average interest rates (I personally would not consider less than 9-12%, 3) either have a track record with buyer (i.e. - been leasing from you already and paying good) or a sizable down payment, because you need to cover the risk of a possible foreclosure, 4) banks and HMLs charge closing costs or points, and you should be able to as well (pick up a few points, up front or add to loan balance). 5) if it is possible you will want to cash out prior to payoff, do yourself a favor and put a balloon in the mortgage (makes the mortgage much more valuable should you decide to sell it), and 6) many paper people suggest splitting into two mortgages, so you could later sell a big first mortgage without taking much discount, and keep a small second for mailbox money. Hope this helps. Good luck!

-Chris in FL

Re: How to set up owner financing. - Posted by Adam-MI

Posted by Adam-MI on March 30, 2006 at 08:30:24:

Go to Office Max (or other office store) and buy a business calculator for $30 and you can figure that all out. They’re fairly simple to use, and they are great to have on hand when you’re negotiating a deal. if you don’t want to do that, look online for a mortgage calculator…I know there are several out there that’ll do the same thing.