The responsibility of securing financing to complete the sale rests with the buyer. Your contract will usually state that an application will be submitted to a potential lender, usually within five to ten days. What happens if the buyer can't get a loan? Should you assist in the financing?
It is generally not a good idea to proceed with seller financing. If your buyer can't get a mortgage from a lender—a specialist in evaluating creditworthiness—then it is a safe bet you shouldn't extend credit either. Think about it: Do you really want to get involved with a bad debtor?
However, if you want to assist with the financing, you should be aware of your different alternatives. Some of these are more risky than others. You should also be aware of what's involved in becoming a lender.
Once the deal is in place, there are several events that will take place before the closing. Once you and the buyer have taken care of all your responsibilities, the closing itself should be a straightforward occasion.If you get into a situation where you have to close on your new home before closing on the sale of your old home, you will need to arrange for a bridge loan to cover you over that interval.