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| Land contract |
Land Contract
In a land contract a person makes payments on a property
with the intention of owing the land only once the property is paid for.
Regular short-term installment agreement is made between the owner and the
buyer. An agreed upon amount is paid for a specific period of time. The title
of the deed is not transferred unless the property is paid off. But in a mortgage payment continues on with
the same amount for a specific time, such as 15 or 30 years.
Benefits of a Land Contract
It happens that a new business is trying to buy up a land
but does not have enough history for a bank to lend the money. No credit
history or a self employment is assumed as obstacles in obtaining a mortgage.
However, in a land contract the seller may have requirements such as a higher
down payment or larger monthly payments than you would find with a traditional
mortgage. In
a land contract, there are no closing costs or money put in escrow. Property
inspections are not required as well. The lender takes care of all the legal
issues relating to transfer of property. Hire a professional to handle all the
work for you.
Disadvantages of
Obtaining a Contract over a Mortgage
In most land contracts it’s must to pay the balance owned by
the end of the period. If you don’t have the money your only option is to extend
the contract longer until you could afford to pay it off, but not all sellers
want to be obligated for a lengthy amount of time. 
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