Interest-free seller financing
My goal: create an interest-free loan which is appealing to a potential homebuyer, yet doesn't make too big of a discount on my end.
For example: If I sold my $300,000 house with 20% down ($60,000) over 30 years, at 6.7% interest rate: $1548.67 principal and interest per month
1548.67 x 12 x 30 = $557,521.20
What I would do would offer a lower monthly payment and no usury, but it would effectively be like a prepayment penalty.
Arbitrarily, let's say 20% off the monthly payment, or $309.73 less per month: $1238.94 monthly payment.
House would be sold at $446,018.40, which is $111,502.8 less than the total paid with a normal mortgage, but $116,018 more than the market price. This is 20% off, or 80% of the original total cost, if you include interest. Down payment would still be $60,000.
Of course if buyer defaults on the loan I would still foreclose, and I would require home insurance/property tax in escrow like the banks do.
Do you think this would work?