Posted 02-25-2002 at 05:39:46
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I purchased the 4 acre lot beside my property from a farmer. He couldn't sell it cause no one had the cash. (actually it was a little pricey, but it's a nice south facing sandy loam site and couldn't resist). I invited him for a coffee and told him the advantages of taking up a personal mortgage with me. I printed out a mortgage schedule and he was all happy about that.
I got a standard Offer To Purchase form and we signed the papers. It gave him a way of building up a retirement nest egg. March is the last payment I'm making on a four year loan.
A personal mortgage still has to be signed before a lawyer to make it legal and to protect both parties. When it's finished you'll have to get a mortgage discharge which is around 80-120$ if you want a lawyer to do it. It has an advantage too, personal mortgages hardly make the corporate echelons, they're just registered at the county house and that's as far as they get.
Your financial debt is always minus the mortgage you owe unless you mention it has an asset for a loan. A second advantage is
you usually fix a rate that is slightly below the going rate, or the average rate. You may need a couple of thou down to clinch the deal, but not always. You can insert the usual early payment
clauses in the contract too.
The people interested in a pers. mortgage are
older people who need steady retirement income.
It gives them a better handle over capital gains taxes too as what they get is in smaller chunks. Your in a good postion to pick up on news of any farmer going into retirement, I'd keep my ears open for a deal.