Sometimes, a land contract is the easiest way to finance a home purchase. In essence, the home seller is the bank. The buyer makes a small down payment, then monthly payments to the seller. Usually, the land contract must be refinanced within a couple years and the previous owner is paid off in full.

Many lenders will consider your purchase of a home you've been renting under a land contract as a refinance, meaning you will be treated as if you have been purchasing the home, also saving you from having to have money for closing if there is sufficient equity to roll them into loan...Make timely, DOCUMENTED payments...

With a land contract you are buying the home from the seller. You are just not obtaining your own financing from a traditional lender. There are many reasons why it may be beneficial to buy a home via land contract versus traditional financing. The main reason is because your credit will not qualify you for the financing you need and/or desire. All land contracts can be treated a little differently, depending on the seller. The seller can require a small down payment a little as a couple of thousand dollars or a much larger down payment of possibly $10,000 or more. The down payment money is your guarantee that you are not going to walk away from the home and obtaining your own financing.

With a land contract it is often good to get it recorded with the county. You will also want to make your payments with a check so there is a paper trail of what you've been paying.

 

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