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Installment Contract
An installment contract is an agreement for the buyer to pay the purchase price in installments over a set period of time. The seller will withhold the title to the property until all installment payments are made. Most buyers will use an installment contract to make it easier to afford a home. When payments are broken down into smaller chunks, it makes it much more affordable to purchase a home. There may be an interest rate attached to the loan that will compensate any lender who makes a loan that is repaid through an installment contract. Installment contracts can be as long as 30 years in some cases. These long-term loans are not unusual when considering the average price of a home. If an installment payment is not made, the contract may be voided.