We are looking to buy a home in okay area contract for deed for $39,900. Agent said would do 1000 down fixed rate at 350 a month for 3 years. How much % of 39,900 would need to be paid to obtain deed @ 8% interest?

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Originally Posted by tonyanddee

We are looking to buy a home in okay area contract for deed for $39,900. Agent said would do 1000 down fixed rate at 350 a month for 3 years. How much % of 39,900 would need to be paid to obtain deed @ 8% interest?

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That would depend on the terms of the contract.

After 36 months, assuming simple interest at 8%, you would still owe a principal of $35,636.00.

Or, calculating it based upon the declining balance (compound interest, if you wiil), you would still owe a principal of $33,038.90.

My calculations are attached.

That's a real high rate of interest at today's market rate.

Your question isn't making a lot of sense. As AK pointed out, in 3 years, you will not have paid the sales price. So the assumption is that the contract calls for a balloon payment after 3 years.

So are you asking how much the balloon payment will be? That should be specified in the contract!