A wonderful, but not widely known alternative method to purchasing real estate is through the use of an installment contract.
Sometimes called a "land contract" or "warranty agreement," the installment contract is another creative approach to real estate investing, especially for prospective buyers who are currently unable to qualify for a satisfactory mortgage loan.
As its name implies, the installment contract purchases real estate in installments. It works much like a "lay-away" plan to buying property with the seller retaining ownership of the property until all payment requirements have been satisfied. Unlike the store "lay-away" plan, however, the installment contract approach allows the buyer to occupy and use the property during the contract period.
The main advantage that installment contracts offer is the opportunity to buy the property with a refinance loan, rather than a purchase loan. The benefit of this advantage is that a refinance can eliminate the need for cash to cover the down payment and closing costs.
Atlas Mortgage has provided a Sample Installment Agreement, as well as a Sample Installment Agreement Proposal, which, as the name implies, offers a sample proposal letter that can help you prepare a proposal that you can present to your seller.
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