![]() You’re right that there are laws to prevent usurious interest rates. Plus, sellers can see tax benefits and higher sales prices, because there isn’t necessarily an appraiser shooting down the value quoted. Why would a seller want this? The closing process can be faster when going this route, which can grease the wheels of the deal. So, in turn, they’re charging you a higher interest rate to cover the risk they’re taking. The seller is acting like a bank in this scenario - but unlike a bank or traditional mortgage lender, they may not be able to sell the loan or rely on other funds should you default on your mortgage. Typically, sellers who finance the home sale charge a higher interest rate than a traditional mortgage lender would. And you came across one of the biggest risks associated with this route. Seller financing isn’t a common practice, but it is a legal one. But in this case it’s clear that your home purchase came with an unexpected feature: Buyer’s remorse. I totally understand the desire to make one’s spouse or partner happy, especially when deciding something as important as where to live. It sounds like you’re taking the Sheryl Crow approach to life: “If it makes you happy, it can’t be that bad.” So even though my mind said, “Walk away,” my heart said, “Buy it for the wife to achieve a happier life,” so we did end up buying it, hook, line and sinker! ![]() S.: Yes, I know this should have been a “walk away” deal, however, a Happy Wife makes for a Happier Life. Best regards and thanks for your articles, “Trying to Live the Retirement Dream in Florida” P. ![]() Thank you very much for any insights on this “forced” seller-financing package. What government regulatory agencies protect buyers from such seller-demanded high interest finance schemes and how can I determine whether this “forced” seller-financed package breaks the law, or not, by using usurious interest rates? We are basically paying mostly all-interest payments and only reducing the principal balance by only about $1,160 during the whole first year. I know the simple answer is to just walk away, however, my wife fell in love with this house and we just had to buy it, according to what she told me. This mandated seller financing package appears to me to be like subprime lending even though my wife and I have 750 and above credit scores and could qualify for today’s low mortgage rates. I recently bought a seller-financed home with the wholesaler sellers requiring that I take their seller financing at an 8.99% interest rate for a 30-year mortgage with the terms being I cannot refinance for one or two years unless I pay either a $6,000 prepayment penalty to refinance after one year and one day, or pay a $20,000 prepayment penalty if I refinance within one year.
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