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Unformatted text preview: oans since purchaser is paying 13% on the entire AITD which includes existing loans payable at lesser interest rates. Seller receives an additional 3% interest on the first trust deed of $50,000 and an additional 1 ½% on the second trust deed of $30,000 and the full 13% on the seller's equity portion of $55,000. ADVANTAGES TO BUYER AND SELLER
Relatively low down payments and below market interest rates are frequently offered with an AITD. In addition: The purchaser may be able to obtain a property for which qualifying may otherwise have been difficult. It may be possible to acquire a larger property with a lower down payment (utilizing more leverage). One monthly installment payment is required rather than payments on separate notes. When the seller becomes the lender, the parties are not subject to the stringent controls of Institutional lenders. The seller's (lender's) effective interest yield will be very attractive. PROCEDURES
Setting up an AITD could include: 9-40 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 9: FIXED RATE MORTGAGE AND ALTERNATIVE MORTGAGE INSTRUMENTS
Renegotiating or paying off any existing loans which restrict alienation. Constructing a realistic payment schedule to cover outstanding balances, periodic payments, and any balloon payments which may pertain to existing loans. Deciding who will administer and pay for collection procedures. Determining what conditions define default. Having an attorney compose the necessary documents and agreements in terms acceptable to the title insurance company insuring the property and acting as trustee. PACKAGE TRUST DEED
A package trust deed or package loan is a type of self–amortizing loan that takes the fixed–rate deed of trust one step further. It is not only secured by the real property, but it includes some of the appliances and other items that are a part of the structure to be financed. Items often included in the package deed of trust are stoves, ovens, dishwashe...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.
- Spring '10