Owner Financing: Making home ownership a reality!

In today’s housing market, it is a great time for a buyer to purchase a home for sale at a great price. If you are able to buy a home but don’t qualify for a traditional mortgage, there is an abundance of opportunities in owner financing.

Owner Financing – What is it?

Owner Financing or Seller Financing is a case where the buyer obtains a  full loan from the seller instead of a traditional lender or bank. Seller financing is simple enough to understand and comes with many benefits.  The seller takes on the responsibility of a lender and the buyer makes direct payments to the seller or to a third party servicing company. This option may be used if the buyer for some reason may not qualify for a traditional mortgage.

Owner Financing- How does it Work?

The seller accepts a down payment and provides a loan to the buyer directly. There are no other lenders or banks involved.

In this situation, the buyer is the 100% owner of the property contrary to a “lease option” or “rent to own” where the deed (shows ownership) does not transfer to the buyer until a later date.

Owner financing has become popular due to a recent “tightening” of credit markets. It has become difficult for buyers with both good and bad credit to get a traditional bank loan.  This kind of financing may ensure a quicker and easier road to home ownership.

Owner Financing – Why is this sometimes the best Option?

Easy Qualification is the main reason. The buyer, in many cases, prefers owner financing to conventional financing because it does not require traditional bank income and credit approval. The buyer may have poor credit because of a divorce or recent bankruptcy. He may be self-employed and cannot prove income. He may be new to his job and cannot meet strict lender guidelines.

As you can see, there are many reasons why a buyer cannot qualify for a conventional bank loan. Owner financing becomes a perfect solution for this individual or family!