| Using a land contract (or "contract for deed" | | | | but you KNOW that will change soon. Just |
| or other similar terms) to buy your home is | | | | because you are not qualified for a home loan |
| very much like getting a mortgage loan from | | | | in the eyes of the bank doesn't mean you |
| a lender and using these funds for your | | | | shouldn't be a homeowner. Many sellers will |
| purchase. Some of the terminology is slightly | | | | share this point of view. |
| different. The seller is known as the VENDOR; | | | | |
| you, the buyer, are known as the VENDEE. In | | | | However, there is an important reason to get |
| this type of transaction, the seller/vendor | | | | a new mortgage loan from the bank in order to |
| makes the final decision about whether or not | | | | buy your home: they take care of many |
| to make the loan. | | | | important details for you. These matters |
| | | | include ordering the appraisal, title search, |
| Whether you use your own funds and pay cash, | | | | and survey. The bank will set up property tax |
| or if you borrow the money from a lender, or | | | | and insurance escrow funds, do the document |
| if you buy on the installment plan (land | | | | preparation and recording, and perform the |
| contract sale) directly from the seller - you | | | | closing itself. |
| OWN the property! You do not receive the deed | | | | |
| to your property until you fullly discharge | | | | In fact, although I firmly believe you |
| the land contract, but you do get what is | | | | should always retain an attorney to review |
| known as equitable title. This form of | | | | all the documents (banks DO make mistakes!!) |
| ownership en"titles" you to all of the rights | | | | you can probably get by without hiring (and |
| (like the tax benefits) and privileges (like | | | | paying for) a lawyer if you buy your home |
| paying the property taxes!) that cash buyers | | | | with a financial institution's assistance. On |
| get. | | | | the other hand, if you do choose to buy your |
| | | | home using a land contract, retaining a |
| Not having the bank involved in your real | | | | qualified REAL ESTATE lawyer is imperative!! |
| estate transaction is good in an important | | | | |
| way. They won't kill your first home deal | | | | ============================================ |
| just because you don't presently meet their | | | | ==================== |
| standards for income and/or amount of down | | | | |
| payment available. You may not have much | | | | More information on land contracts and other |
| money saved for a down payment yet, and you | | | | topics of interest to the first time home |
| are still earning a relatively small salary - | | | | buyer is available on the author's website. |