How to Owner Finance Your House

You've seen the estate adverts in the classifieds section of the paper [*CO]'Owner Financing Available' or'Owner Will Carry'. An owner backed property exchange enables the buyer of the property to make payments directly to the seller.

This allows the buyer to get the estate without having to apply for a mortgage from a bank or financial establishment. The vendor also has the option of selling the loan to an investor for money.

These are only some of the things a stockholder likes seeing. Backers buy all kinds of real estate notes and deeds of trust. Each house is dissimilar, every loan is different and every deal is dissimilar.


Sell Your Property For your chosen Asking Price

A buyer may be completely pleased to pay market valuation ( and perhaps more ) for a home that requires a smaller down-payment and that a bank won't help them finance.

Charge a Higher interest rate Than a Bank Would Give

By charging a higher interest rate than a bank ( say 7.5 - 8.5% ) you are in effect , skyrocketing the sales price of the property, and making the note more enticing for a backer.

quicker Sell

You can sell a home with owner financing a lot faster than with bank financing and there can be tax advantages in spreading the buyer's payments out over time ( talk with an accountant about that ).

Great Monthly money Flow Investment

Many owners simply like the concept that they can receive a monthly income and a high IR from a property even after they have sold it - and don't have to fret about correcting leaky roofs or replacing dead water heaters.
Sell The Note To a backer
A seller who owner financed the deal also has the option of selling that note to a backer for money either straight after closing or after waiting a number of months or years ( give me a call or e-mail and I'm able to get you more information about selling your note ).

Seller receives only a small or even no down payment.

Due-On-Sale Clause

If I owner finance my house won't I turn on the Due-On-Sale Clause in my mortgage and if i'm only getting a little deposit and monthly installments how will I pay the bank loan back?

It is maybe the most talked about, feared and misunderstood topic in property.

There are techniques of stopping the Due-on-Sale Clause from turning on like setting up a land trust. A competent real estate lawyer would be about to help you set one up. Especially in this economy.

you may do a concurrent closing, where a few days after the close of the house with the purchaser you receive a check for the note from a stockholder.

Asking a seller to offer owner financing to buy their home could be a tricky offer. Sellers often reject the proposal of owner financing because no-one has explained the advantages or proposed owner financing as a way to sell the home.

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