BENEFITS OF OWNER FINANCING:
Negotiability. One of the best things about owner held financing is the seller and buyer are free to negotiate the terms, subject only to state regulations and federal usury laws (a seller can’t charge an exorbitant amount of interest for the loan).
You may or may not have a down payment depending upon what you negotiate and what the seller’s needs are. Some owners may require 25% or more down, while others are more flexible.
Tailored Financing: Most sellers who are willing to provide carryback mortgages are less concerned with specific loan terms than they are with knowing what the monthly payment will be. They are therefore more negotiable with you on what your loan will be.
Few Qualifying Documents. The seller determines what they want to see for consideration. Usually, it is far less than what a bank wants as sellers are far less stringent.
Freedom. Non-conventional loans are more common. Sellers and buyers create their own options, such as interest only, fixed-rate amortization, or multi-year ARM’s, etc. The ability to negotiate allows this.
Down Payment Flexibility. Even if a buyer doesn’t have the full amount of a down payment, the seller may be willing to allow the buyer to make payments over time, towards a down payment.
Low Closing Costs. Without a mortgage broker or other middle party to the loan, your closing cost automatically should be lower. In addition, there usually are no points, administrative, origination or processing fees that you will have to pay. Certain costs, like Title and transfer tax, are unavoidable. Of course, there may be real estate agents involved in the transaction to help with the marketing of the property. We welcome real estate professionals to ownercarryit.com.
Faster Possession. As there is no lengthy loan underwriting process, you can move in much quicker.
No PMI Insurance. Whether a buyer puts down zero percent or nineteen percent, there is usually no mortgage insurance, which would be an additional payment with traditional loans. Sellers can ask for PMI Insurance, but that is likely negotiable.
