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    rpt903's Avatar
    rpt903 Posts: 1, Reputation: 1
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    #1

    Mar 25, 2010, 11:34 AM
    What is a good interest rate for a contract for deed
    I am planning on buying a home through a contract for deed. The purchase price is 160,000. I will be discussing the terms with the owner shortly and would like to be knowledgeable. What is a good interest rate, and what are some important things to go over when deciding terms
    tickle's Avatar
    tickle Posts: 23,796, Reputation: 2674
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    #2

    Mar 25, 2010, 01:39 PM

    You should not do this without a lawyer or a qualified real estate agent. I know you are probably doing this to save money, but what if you get the short end of the stick and these people are not above board with you ?

    Tick
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692
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    #3

    Mar 25, 2010, 03:04 PM

    As a seller, I would be looking for at least 10 percent down payment, tand hopefully 15 percent.

    The less down payment the higher the interest rate.
    Also this is not really like a mortgage, and in some contracts it is not really referred to as interest, merely a monthly payment for so many months to pay off the debt. Or to go to a ballon note at a future date.

    I have always used 10 percent, for many years, if the people had the credit to get a real loan, they would, so it means this is often a high risk loan. So I have friends who even use 12 to 15 percent interest on thiers.

    Also most have terms for default where it reverts to a rental if you are 10 to 30 days in defualt of any condition of the contract.

    Also many will require you pay for insurance, taxes and other repair costs.
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