Does it mean they are the ones that approve your loan? Are they usally stricter or more leniant than a financial institution?
2007-02-05 06:51:15 · 6 answers · asked by sweetjenv23 3 in Business & Finance ➔ Renting & Real Estate
Owner financing (also called seller financing or owner carry-back) is when the seller of a property allows the buyer to pay all or some of the purchase price over time. Typically, the transaction is set up as a private mortgage which means that the seller holds a lien on the property – just like a bank. In many situations, this may be an optimum solution for both the buyer and seller.
With owner financing, sellers have the opportunity to attract a larger number of buyers, and overcome potential valuation problems, which can result in a higher sales price of their home. Buyers can obtain a mortgage when they might not qualify for one otherwise, and can achieve lower closing costs which could result in thousands of dollars in savings. "
2007-02-05 07:02:46 · answer #1 · answered by Michael 2 · 0⤊ 0⤋
It means the owner will act as the bank. Make sure you have a good real estate lawyer draw up the mortgage giving you all the rights the bank would in case of default. Some sellers will finance and if your 1 day late, they will foreclose. If you can get a conventional loan through the bank, you may want to pursue that route instead.
Good Luck
2007-02-05 07:01:46 · answer #2 · answered by frankie b 5 · 0⤊ 0⤋
get prequalified by a loan officer first thing. Then get a realtor that some one recommends to you if at all possible. Then go house hunting. Place an offer and once accepted then get the inspections done and give the loan officer any additional items he or she needs shop for home owner insurance and close then move in. Sounds easy but it is the most stressful time in your life. Just because you can buy $XXX home try buying less if you can don't max yourself out in mortgage as with home ownership comes expenses and I always tell my clients to have on top of down payments etc to have an emergency fund of 6 months living expenses in it as use it only for life's emergency's then replace it asap as the last thing you want is to have a mortgage and no fun in your life. Good luck in your quest. I am a mortgage banker in TN & KY
2016-05-24 18:56:42 · answer #3 · answered by Anonymous · 0⤊ 0⤋
It means the seller will lend you the money, on a contract for deed.
Generally, they'd be more lenient, but not necessarily.
Be aware, if you defaulted, your rights are not nearly as good on a contract for deed as compared to a bank mortgage. In most cases, they can padlock the door within 60 days, where with a normal mortgage, you could be in the home for almost a year after stopping paying before the bank could remove you.
2007-02-05 07:10:08 · answer #4 · answered by Anonymous · 0⤊ 1⤋
That means you pay them. But if they don't pass through your payments to their borrower you could lose everything. Check to see that they own it free and clear, if they don't have your payments go through an account that pays the old mortgage first. Make sure you file a deed that notifies people of a change in owner.
2007-02-05 06:56:57 · answer #5 · answered by professorc 7 · 0⤊ 1⤋
that is a great question to which I have no answer.
2007-02-05 06:57:28 · answer #6 · answered by Johnny A 5 · 0⤊ 2⤋