Posted on: 12th Nov, 2009 08:04 pm
I am trying to get a home that is going to be owner financed but he is trying to charge me 8% interest. Is that to high and does it sound like a scam?
Hi jprice,
Interest rate of 8% is a bit higher than the current market rates on home loans. But owner financing is not a conventional way of financing a home purchase. Thus, the interest rate on this type of financing is usually on the higher side. However, a lot also depends on various factors like your credit, history of payments, how much you want to pay upfront, etc. It is hard to say if it is a scam. But it will not be justifiable to think it is a scam, just because the owner is charging a little high interest rate.
Interest rate of 8% is a bit higher than the current market rates on home loans. But owner financing is not a conventional way of financing a home purchase. Thus, the interest rate on this type of financing is usually on the higher side. However, a lot also depends on various factors like your credit, history of payments, how much you want to pay upfront, etc. It is hard to say if it is a scam. But it will not be justifiable to think it is a scam, just because the owner is charging a little high interest rate.
You already asked this in another thread. 8% is not too high. I would charge at least 10%
