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Owner financing can be a useful tool in many ways and in situations like: a tight credit market, Buyer’s Market with no offers, or issues with properties in need of extensive repairs. It allows Sellers to move homes faster and get a profitable return on their investment. Buyers benefit from less stringent qualifying requirements than financial institutions do, and better loan terms on purchase that otherwise might be out of reach.
In owner financing, the seller takes on the role of a lender. The Seller extends enough credit to the Buyer for the purchase price of the home, minus any down payment. The Buyer and Seller sign a Promissory Note (which contains the terms of the loan). They record a Mortgage (or “Deed of Trust” in some states) with the local public records authority. Then the buyer pays back the loan over period of time with interest, as per terms of the Note.
OWNER FINANCINGPROCESS
Step One
Seller – decidesto Owner Finance
Buyer – gets approved with the Seller
Step Two(if applicable)
Buyer in Agreement with Seller
Seller moves-out, Buyer moves-in
Step Three
Seller – holds mortgage
Buyer (New Owner)makes payments to Seller (Lender)
Step Four
Buyer (New Owner) – Pays-off mortgage by refinancing or sells the property in the future
Seller (Lender) – Receives unpaid balance due
If you are Seller or Buyer, let our team apply our knowledge and effort to assist you with these types of transactions. Our knowledge is your benefit!
Contact Us today to participate!
