Is there a credit check in a seller financing transaction?


In a seller financing deal, because the seller is financing the deal, there isn’t necessarily a credit check involved. This is the decision of the seller. However, if you’ve been renting the place for a while, there will probably be no need for a credit check because you and the seller already have a relationship, and the seller knows your payment history.

For the short term

Seller financing deals are often done when buyers have poor credit and can’t get a loan from a bank or mortgage lender. If that’s your story, you will probably need to raise your credit score eventually. Usually, seller financing deals are short-term.

Typically, the deal might be for the loan to be amortized for 30 years but then have a balloon payment, where the balance is due, after five years. At that time, you’d need to refinance with a bank.

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