Financing a Real Estate Purchase in Key West.

Few people have enough cash to buy a home outright (especial in Key West) Most need to finance their real estate purchase by borrowing money. Usually, this is done by contracting with a financial institution such as a bank or savings and loan. The buyer agrees to pay interest on the money borrowed and the lender retains a lien (mortgage) on the property. In some cases, buyers are able to obtain seller financing in which the buyer pays interest to the seller and the seller retains a lien on the property. In other cases, a buyer is able to assume the seller's mortgage. That is, the buyer pays the difference between what is owed on the mortgage and the purchase price and takes over the seller's payments on the mortgage. (Note that this can occur only if provisions in the mortgage state specifically that it is assumable. Most mortgages written today include a due-on-sale clause that prohibits assumption of a mortgage.) In the event that a buyer can assume the seller's mortgage, the seller should remember that he or she remains liable to pay the mortgage unless the seller's lender specifically and in writing releases the real estate seller from this obligation.

Today in Key West, a wide variety of financing mechanisms exist to finance a purchase. Some buyers may qualify for federally insured loans that permit smaller-than-normal down payments and lower interest rates than prevailing market rates.