Get MI Request for Land Contract Status

A land contract can be an appealing option for a potential homebuyer who might have difficulty qualifying for a mortgage loan. But there are potential risks to be wary of as well. ... Instead of taking out a mortgage, the buyer agrees to make regular payments directly to the seller, who still retains title to the property.

You are not able to report the payments to the credit bureaus. ... But, more often than not, individuals who act as creditors in a land contract arrangement do not report payment history because they have to pay a fee to register with the reporting agencies and report payments. Consider negotiating with the seller.

A land contract is often viewed as a way to "pay down the purchase price" before obtaining a regular mortgage to buy the property outright. Often, the terms of the contract will call for 5-10 years of regular payments, concluding with a balloon payment for the balance of the mortgage.

A land contract is not legally required to be recorded in Michigan. However, both the buyer and the seller may wish to record the contract to protect their interests in the property. The land contract should be signed in front of a notary public or local judge.

Know your credit score. ... Land contract payments aren't reported on your credit, so your lender will require other payment verification through canceled checks or bank statements, etc.

A land contract can be an appealing option for a potential homebuyer who might have difficulty qualifying for a mortgage loan. But there are potential risks to be wary of as well. ... Instead of taking out a mortgage, the buyer agrees to make regular payments directly to the seller, who still retains title to the property.

Interest. Most land contracts require the buyer to pay the seller monthly payment installments that include principal and interest. ... The amount of interest received by the seller under the terms of the land contract is considered unearned income by the IRS and should be reported on the seller's annual taxes.

However, in Michigan the interest rate cannot be above 11%. It is possible for the interest rate to change over time, but the average interest rate has to be 11% or less. In general, the buyer is in charge of making all repairs and paying property taxes in most land contracts.

The percentage required for the down payment on the land generally varies based on how you plan to use the property. Down payments of 20% are common, but some lenders may require down payments as high as 50%. Depending on how you plan to use the land, the government may be able to offer lower down payment loan options.

A land contract is an agreement between a buyer and a seller that states the buyer is purchasing property but will not receive the legal title until the debt has been satisfied. ... Land contracts are legal and binding in Michigan and must be in writing in order to be enforced.