What People Need To Know About Land Contracts

May 8, 2013 - PRLog -- Land contracts are becoming more popular in today's tight credit and real estate market. A land contract is a legal agreement in which a land owner sells a parcel of land with a house on it and agrees to finance the purchase for the buyer.

A land contract cannot be made for land alone; a land contract also must include a loan to the buyer. To satisfy the contract, the buyer makes monthly payments, which include interest, to the seller until the loan is paid in full. Only upon satisfaction of the contract does the seller transfer the property’s deed to the buyer. While land contracts have elements similar to“lease to own” and“rent to buy” agreements, those agreements are not land contracts. Land contracts are complicated transactions and you should never enter into one without first consulting legal counsel.

A free consumer organization called "Bad Credit MD' has listed the pros and cons of land contracts for both the buyer and the seller. This valuable information can be viewed at http://www.badcreditmd.com/mortgages/pros-and-cons-of-land-contracts/.

Before a consumer enters into a land contract, they should also visit The Department of Housing and Urban Development (HUD) website. They are the nation's housing agency that has a helpful list of 9 steps to buying a home, which includes figuring out how much they can afford, knowing their rights, shopping for a loan, making an offer, getting a home inspection, and much more.

A potential home buyer may also want to consult The Federal Housing Administration (FHA), which is part of HUD that insures loans. FHA loans can help a consumer obtain a mortgage who might not normally qualify otherwise. FHA offers low down payments, low closing costs, and easy credit qualifying. A home buyers down payment can be as low as 3.5% of the purchase price, and most of their closing costs and fees can be included in the loan. Learn more at http://portal.hud.gov/hudportal/HUD?src=/buying/loans.

Bad Credit MD, is a free On-line consumer information guide that helps people with credit problems and has been in business helping consumers with bad credit since April of 2007 and is a subsidiary of Enticing Designs Publishing. The staff has various backgrounds in the financial and mortgage industry. Its staff has researched its information with various governments around the world to provide the most comprehensive and accurate information free of charge.