Deciding Whether to Carry Part of a Loan


A: I heard that the potential buyer is interested in me carrying part of a loan for him.
B: Carrying part of a loan can be a good or a bad thing, depending on the circumstances.
A: What would be an advantage of me carrying a note on the house?
B: If you don't need the money right away, you can earn a fairly good interest rate.
A: Why does my buyer want me to carry part of his loan?
B: In this economy, buyers sometimes have trouble getting a loan even when they have good credit.
A: What are the risks to me?
B: The risk is that the market could drop drastically and the owner would walk away.
A: How long will I need to commit to financing this loan?
B: You need to make an agreement with the buyer as to how long you will carry this note.


A: My potential buyer has asked me to carry part of his loan.
B: The decision to carry part of a loan might be advantageous to you or problematic.
A: Why would I ever want to carry a note on a house?
B: It is a type of investment that can offer a fairly steady return over a set period of time.
A: Why is my buyer requesting that I carry part of his loan?
B: Oftentimes buyers are well able to afford the home but unable to qualify for a loan.
A: Are there any risks in carrying a second mortgage?
B: You are basically betting on the fact that the home is not going to drastically fall in price. This could leave you with a house that is not worth much.
A: Will I be financing this loan for a set period of time?
B: That is entirely up to you and the buyer.


A: If the purchaser of your home wants you to carry part of the loan, is that good?
B: Carrying a loan could be good or bad for you as a seller.
A: Why would it be a good thing to carry a note on my own house?
B: For investors who can afford to have their money tied up, it can offer a fairly nice return.
A: What advantage is my buyer looking for in having me carry him on paper?
B: We are seeing more and more buyers who are not able to qualify for a loan and are able to take out a second mortgage with the owner.
A: Can I lose my money if I carry a second mortgage?
B: It is an investment and carries some risks. You are counting on the housing market to not go into a tailspin.
A: Is there a certain amount of time that I will be carrying this loan?
B: The buyer and seller set the year for the loan to come due.


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