APPROVE MY HOME LLC
Seller Owner Financing Coming Soon ...
Having a hard time getting traditional lending from the bank to buy your dream home??
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No Income Requirement
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Minimum Credit
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No Balloon
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No Prepayment Penalty
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No Sourcing or Seasoning of Funds
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No Time on Job Requirements
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Self Employed OK
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Foreign Nationals OK
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Tax Identification Number OK
Phone:
414-841-5004
Email:
Address:
801 Forest Ridge Drive Suite111 Bedford, TX 76022
All 50 States
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Single/Multi-Family Homes
Owner Financing: What It Is & How It Works
Owner financing allows a buyer to purchase real estate without taking out a mortgage from a lender to buy it. The owner and buyer work out an arrangement to make a down payment and installment payments directly to the owner. The payments continue until the debt is satisfied, or the buyer can secure a mortgage and complete the purchase by later doing a refinance into a mortgage loan.
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In most cases, owner financing is used when the buyer is unable to secure financing for a mortgage, either due to the financial or credit history of the buyer or the condition of the property. Owner financing can be used to purchase any type of commercial real estate, from an apartment to raw land.
Like a traditional mortgage, owner financing requires legal paperwork, including promissory notes, mortgages, and trust deeds. The paperwork is standard and protects all parties involved in the transaction.
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The mortgage or deed in trust provides security to the owner. They place a lien on the property and provide remedies to the owner if you default on payments. They’re filed with the local courthouse and contain a detailed description of the lien and the expectation of repayment. The filed document provides the basis for foreclosure if necessary.
Owner financing may go by other terms, including seller financing, owner carried financing, owner carryback, and owner will carry.
Seller Owner Finance Your Own Home Today!!
Buyer Pros and Cons to Owner Financing
Owner Pros and Cons to Owner Financing
Create your own terms
Pros:
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Helps buyers who can’t get a mortgage: Whether due to the credit and financial history of the buyer or the condition of the property, seller financing can allow a buyer to purchase a property without qualifying for a traditional mortgage.
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Terms can be more flexible: Since this is an agreement with the seller and not with a lender, the terms of the agreement can be more flexible than a traditional mortgage.
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Lower closing costs and faster closing: This is especially true if the seller wants to sell the property quickly. A seller is likely to require far less in fees for closing than a lender would, and the deal can be done in a matter of days instead of weeks.
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Cons:
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Foreclosure risk: If there’s an existing mortgage, the owner is responsible for making payments on the mortgage. If the owner stops paying, the lender can foreclose on the owner even if the buyer is current.
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Terms may be expensive: The seller may charge higher interest rates or shorter repayment terms because they know you can’t get financing from a lender. Be familiar with the current commercial real estate rates before beginning negotiations.
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Seller may be unwilling: In the end, the seller might decide they would rather sell to someone who can get financing to purchase the property outright instead of dealing with seller financing.
Pros:
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Can get the property sold faster: The process of selling through an agent and a traditional lender can take 60 days or more. An owner financing arrangement can be closed in a matter of days.
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Can get a higher price: Since you have leverage on the buyer because you’re financing the sale yourself, you can get a higher asking price.
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Can generate interest income: You’ll likely charge a higher interest rate than a lender would, so you can generate interest income.
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Cons:
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You don’t get all the cash upfront: Because the sale includes the buyer making payments toward the purchase instead of getting a loan to pay you a lump sum, you don’t get that instant influx of cash.
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You’re responsible for existing mortgages: If the buyer decides to stop paying, the owner is still responsible for paying the mortgage. The owner’s credit can be damaged if the buyer stops paying.
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Could risk having too many mortgages: If you attempt to sell three or more properties, you’ll be expected to obtain a mortgage originator’s license due to the Dodd-Frank Act. This limits the number of owner financing opportunities available.
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When you offer owner financing, you have the ability to create your own terms. You aren't restricted to the traditional mortgage terms offering a competitive, low interest rate for 30 years.
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As long as you remain compliant with the Dodd-Frank Act and your state’s usury laws, you can charge a slightly higher interest rate or have a balloon payment, both of which increase your return on investment. With owner financing deals, you have the freedom to negotiate and create terms that provide you with your desired return and also make sense for the buyer.