Seller-finance rates? (2015, 4%, sale, banks)

[jb907]

I'm looking to sell a lot, seller-financed, in Alaska. This is a lot for a house, not recreational property. What are current seller-financed rates now, Spring 2015?

I've seen rates of 8-10% from a few years ago, but wonder what rates are now.

[FalconheadWest]

Seller finance rates are typically around 2-2.5% over the basic rate someone could obtain. So if they could possibly get 4% in today's market, you could get 6-6.5%. You are NOT allowed to charge outrageous amounts as that can get you in lots of trouble stemming from the subprime stuff from a few years ago.

[jackmichigan]

The rate you can charge on a Seller-financed contract is negotiable. Alaska may have a limit on the percentage which can be charged on owner-financing. In Michigan, the maximum rate which can be charged on such a personal loan is 11%. It's best to try to negotiate as high of a rate as you can so as to encourage re-financing (provided you want the cash). Typically, however, a reasonable rate is few percentage points above what a bank might charge. If someone can't get a bank loan, however, they may not be a good prospect for owner-financing, either.

[jb907]

Banks here loan based on the tax assessed value, which is well below the sale price. The DP would have to be about 75% to get a bank loan.