Homeownership is one of the best tools to achieve your financial goals. However, if you find yourself unable to qualify for a mortgage due to credit, income, or other issues, your progress can take a hit. At Slow Flip, we work to make the contract for deed process as simple and transparent as possible, in order to help homebuyers reach their goals. There are many CD benefits that can get you closer.
CD Benefits for Buyers
- No Mortgage Required: One of the most impactful benefits of a contract for deed is that it allows buyers who don’t qualify for a mortgage to buy a home. Then, buyers have time (up to five years in the Slow Flip contract for deed) to adjust their finances in order to get a mortgage.
- No Mortgage Insurance: Unless you qualify for a conventional mortgage and buy with a 20% down payment, mortgage insurance will most likely be included in your monthly payment. With a contract for deed, there is a premium added to your contract balance, but your monthly payment has no mortgage insurance. The funds paid for your contract balance are either principal or interest.
- Tax Deductible Interest: A contract for deed has the same tax-deductible interest consideration as buying a home and using a mortgage to finance.
- Decreasing Balance: Much like buying a home with a mortgage, your contract for deed balance will reduce with each payment, since part of that payment includes principal. This is different than a lease option or rent-to-own agreement, which often have upward price adjustments year after year or even month to month.
Want to learn more about the contract for deed process? Check out these blog posts:
Contract for Deed vs. Rent-to-Own
How Does Minnesota Regulate Contracts for Deed?
Why You Don’t Need Mortgage Insurance with a Contract for Deed
How to Find a Home to Buy with a Contract for Deed
The Slow Flip contract for deed program helps families in the Twin Cities metro area of Minneapolis, St. Paul and surrounding suburbs purchase a home using a contract for deed, or CD, when a mortgage is not possible. The Slow Flip contract for deed can be an ideal tool to purchase a home when buyers need time to adjust their income, credit, debts or other financial components so they can eventually qualify for a mortgage.
Are you or your clients interested in learning more about the Slow Flip contract for deed? Contact us at 952-417-0000 today.