SHOULD I BUY ON A CONTRACT OR BANK FINANCING???

[Travis Elliott]

I am looking at buying my second house. I just found out that the owner has it paid off so there may be a possibility of doing a contract on it.. I am wondering what the pros and cons are of using bank financing versus a contract..

If I do a contract with a five year balloon and interest rates skyrocket then I have hurt my self correct?

Thoughts?

[Chris Martin]

In a case like this, I would make an offer using seller financing and not bother with bank financing unless as a last resort. It's hard to know the exact deal/offer to structure without more details, but you pretty much have unlimited possibilities since the property is free & clear. Talk to the seller and see what he wants. Seller may be fine with an installment sale... e.g. $70K, payable $700/month over 100 months. You don't know until you ask.