Even if the seller demands a credit report on the buyer, the seller's interpretation of buyer qualifications are typically less stringent and more flexible than those imposed by conventional lenders.
Tailored Financing.
Unlike conventional loans, sellers and buyers can choose from a variety of payment options such as interest only, fixed-rate amortization, less-than-interest or a balloon payment. Payments can mix and match. Interest rates can adjust periodically or remain at one rate for the term of the loan.
Down Payment Flexibility.
Down payments are negotiable. If a seller wants a larger down payment than the buyer possesses, sometimes sellers will let a buyer make periodic lump-sum payments toward a down payment.
Lower Closing Costs.
Without an institutional lender, there are no loan or discount points to pay. No origination fees, processing fees, administration fees or any of the other assorted miscellaneous fees that lenders routinely charge, which automatically saves money on buyer closing costs.
Faster Possession.
Because buyers and sellers aren't waiting on a lender to process the financing, buyers can close faster and get buyer possession earlier over a conventional loan transaction.
Owner Financing Benefits to Home Sellers
Higher Sales Price.
Because the seller is offering owner financing, the seller may be in a position to command full list price or higher.
Tax Breaks.
The seller might pay less in taxes on an installment sale, reporting only the income received in each calendar year.
Monthly Income.
Payments from a buyer increase the seller's monthly cash flow, resulting in spendable income.
Higher Interest Rate.
Owner financing can carry a higher rate of interest than a seller might receive in a money market account or other low-risk types of investments.
Shorter Listing Term.
Owner financing attracts a different set of buyers. If a property is not selling under conventional methods, offering owner financing is one way to stand out from the sea of inventory and move a hard-to-sell property that otherwise might not sell.
In closing, before entering into a transaction with owner financing, consult a real estate lawyer and obtain competent legal advice. E.Weintraub
Little or No Qualifying.
Even if the seller demands a credit report on the buyer, the seller's interpretation of buyer qualifications are typically less stringent and more flexible than those imposed by conventional lenders.
Tailored Financing.
Unlike conventional loans, sellers and buyers can choose from a variety of payment options such as interest only, fixed-rate amortization, less-than-interest or a balloon payment. Payments can mix and match. Interest rates can adjust periodically or remain at one rate for the term of the loan.
Down Payment Flexibility.
Down payments are negotiable. If a seller wants a larger down payment than the buyer possesses, sometimes sellers will let a buyer make periodic lump-sum payments toward a down payment.
Lower Closing Costs.
Without an institutional lender, there are no loan or discount points to pay. No origination fees, processing fees, administration fees or any of the other assorted miscellaneous fees that lenders routinely charge, which automatically saves money on buyer closing costs.
Faster Possession.
Because buyers and sellers aren't waiting on a lender to process the financing, buyers can close faster and get buyer possession earlier over a conventional loan transaction.
Owner Financing Benefits to Home Sellers
Higher Sales Price.
Because the seller is offering owner financing, the seller may be in a position to command full list price or higher.
Tax Breaks.
The seller might pay less in taxes on an installment sale, reporting only the income received in each calendar year.
Monthly Income.
Payments from a buyer increase the seller's monthly cash flow, resulting in spendable income.
Higher Interest Rate.
Owner financing can carry a higher rate of interest than a seller might receive in a money market account or other low-risk types of investments.
Shorter Listing Term.
Owner financing attracts a different set of buyers. If a property is not selling under conventional methods, offering owner financing is one way to stand out from the sea of inventory and move a hard-to-sell property that otherwise might not sell.
In closing, before entering into a transaction with owner financing, consult a real estate lawyer and obtain competent legal advice. E.Weintraub