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