What It Means To Buy A House With Owner Financing
Posted on: 20 June 2018
As you take a good look at your finances and credit, you might discover that buying a house is probably not something that is going to happen for you for a while, unless you can find a homeowner that is willing to sell with owner financing. To buy a house with a mortgage loan, you will need to meet the credit and financial requirements of a lender. If you cannot do this, you could still buy a house, but you would have to look for one that is for sale with owner financing.
What is owner financing?
Owner financing is when a homeowner sells his or her house to someone but keeps the mortgage on the house. The homeowner becomes the lender in this situation, while the buyer is still the borrower. This means that the person buying the house does not need to apply or qualify for a loan through a bank. Instead, the homeowner takes on the risk instead of a lender.
Why would a homeowner offer this?
Homeowners offer this for several reasons, and one reason is that they cannot find a buyer for their home. If they cannot find a buyer, they will offer something like this simply to have a way to move out and not have to pay two mortgage payments. Secondly, homeowners do this for investment purposes. If a person agrees to buy a house through this method and fails to pay for it, the homeowner could evict the person and keep the money from the deal. The homeowner could then look for another person to sell the house to.
Should you use this option?
If you really want to own a house but cannot get a loan, this is one of the best ways to achieve your goal. There are risks with deals like this, so you should use caution, and you will need to make sure you have money to put down on the house. Owner financing is a great option for people in this situation, as it offers an alternative way to buy a house.
Buying a house is a dream for many people, yet there are many people that cannot do this because they cannot get loans. If you are in this situation and really want your own house, you could talk to your local real estate services about helping you find a house that is for sale with owner financing.
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