How does the seller determine the rate?
The interest rate on a Seller Financed Transaction is negotiable. A seller can check with lenders and mortgage brokers to determine current rates on mortgage loans. Normally sellers do not charge loan fees or points therefore seller financed costs are generally less than a conventional home loan. Interest rates are reflected by current Treasury bill and certificate of deposit rates. Most sellers will not want to provide a loan for a lower interest than the market is offering. Interest rates the seller charges may be higher than those on conventional loans. Five to 15 year loans are usually acceptable.