The installment contract requires the buyer to make regular— usually monthly—payments to the seller. These payments are not rent; they are actual installment payments applied to the purchase price.
Many sellers will amortize the payments to reflect interest charges. Some sellers, however, just establish a sales price and allow every installment payment to fully deduct from that sales price. Whenever possible, the buyer should try to arrange this latter, no-interest method of scheduling payments.
The schedule of payments normally allows for a grace period of 10-15 days before the borrower is considered delinquent, as well as for a limited redemption period before a notice of default is issued. A default immediately allows the seller to terminate the contract, evict the prospective buyer and keep any funds paid to date by the buyer.
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