Down payments are a key part of the home buying process. The down payment is typically what makes up for any difference in the amount financed and the purchase price, which can be used to guarantee that there is enough money in reserve to cover the mortgage if it becomes necessary. Sellers sometimes assist buyers with their down payments when they make extra cash available on top of what’s required by their lenders. But this additional help should not come without safeguards!
Read on to learn about 3 ways sellers can provide assistance while still protecting themselves from liability. -Seller can give buyer an additional purchase price. This is typically done only in situations where the seller has a lot of equity and wants to help out the buyer with their down payment but still maintain enough money for themselves , -Buyer may be asked to sign an agreement that stipulates they will pay back any assistance given by the seller.
The amount owed might be calculated as “the principal balance minus accumulated interest on what’s been paid off.” form this point forward, monthly payments are made based on the new agreed upon loan amount., -The lender could release liability from selling assisted mortgages if there is written documentation outlining how much was given towards financing and when it needs to be repaid or acknowledged by all parties involved (