Hi,
We are selling our house on contract and would like to know what interest rate is customary for a contract. We pay 5.95 on our arm loan and 8.5 on our second mortgage.
We, of course would like to make some money, but not gouge the buyer.
Thanks in advance,
Lora

Contracts for sale are not necessarily based on an interest rate since they aren't an actual loan. Just set the payment amount at something to cover your monthly outlay.

Hello LORA:

WITH a minimum 20% down payment, in my view.

excon

I do many sales on contract for deed, and yes often I just make something up as I go along, I figure on those that I owe money on, how much my payments are, other expected expenses and the such, throw in so much profit for me. And the such

In that I make a contract that merely says they have to pay so many payments of so much for a number of months.

Remember in a contract for deed the other party is not gaining real equity in the home, athey don't get the deed until they pay you a certain amount of money.

If you want to be the lender and you hold a loan, and transfer the title to them, then you have a loan contract.

For example the last home I sold was for 250 a month for 20 years.
Which is 60,000 dollars I think. For example I paid about 14,000 for the house and did about 5000 in repairs. My down payment was 5000 dollars.
So by the time they pay it off I will have about 46,000 profit.

But many times the idea is that on a contract for deed, since most people never keep it all that time, they keep it 2 to 5 years, and have to move, so I take the house back, and they have no equity in it, and then I remodel again and sell it again. That way I keep making even more on that same house.

I have sold a few where I actually held a loan, and I do them at 10 to 15 percent interest. Now these people may actually have OK credit but for some reason the local banks turned them down and they did not try a mortgage company.

But there is a reason people buy on a contract for deed, it is like buying a car at a buy here/ pay here lot, they do it because no one else would ever loan them the money

Thank you for the information, Gentleman. I really appreciate it!
Lora