Real Estate Questions
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Contract
for Deed Imputed Interest Rate
Contract for Deed Imputed Interest Rate
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Imputed interest is a ruling that comes from the IRS, as far as what the minimum interest rate is that can
be charged when selling a home on a contract for deed or with owner financing. To get the latest on what the
minimum rate is or imputed rate please keep updated on the IRS website. One definition I got online was
interest that is considered to be paid, even though no interest payment has been made. Another website
I went to stated this: The Internal Revenue Service has special "imputed interest" rules that apply if no interest
is charged or if the interest rate charged is lower than the statutory federal rate of interest. The IRS treats such
loans as having a higher interest rate than the rate stated in the Contract. Keep in mind that a contract for deed
may have a different dynamic to it than other types of financial vehicles so please consult with a tax professional or
attorney if you feel you need ot.
Contract for deeds have many advantages over other types of transactions like rent to own, lease options or just
renting. A buyer is looking to eventually refinance a contract for deed before the balloon date expires. Our
real estate agents are here to here to answer any questions that a buyer or seller may have. Buyers can determine
the interest rate that they can afford through our payment calculator. Buyers enjoy searching for contract for deed
homes for sale on our website to see great photos and a lot of information on each property. To look over your
interest vs. principle reduction on the payment calculator you could look at the amortized time frame, such as
a 15 year, 20 year or 30 year amortized table. You will likely want to go over a checklist of steps to complete
throughout the process, that's what are agents are here to help with. If the seller decided to do an interest only,
loan instead of amortize it, then there won't be a principle reduction. Imputed interest is just one of the real
estate laws that are applied to these types of transactions.
Our agents are here to help with all of the paperwork, they are here to help discuss the moving date and closing
date of possession exchanging hands. Our agents are here to help show you new listings by email and in person.
They are here to handle the negotiating between the buyer and seller of so many things including the payoff date
for the balloon payment, the personal property that will stay with the house, and the final sales price. Our
experienced agents know the requirements and rules as well as most agents around the cities as they are use
to doing these types of transactions. If you want to read an article about Minnesota homes for sale, you may read my
article by clicking on my link right here: contract for deed MN. My article will walk you through
the process (step by step) of how to work with a contract for deed agent here locally.
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