How To Buy A House With Seller Financing - No Credit No Problem

#SellerFinancing #OwnerFinancing #AlternativeMortgages

Seller Financing is a Real Estate Agreement in which seller handles the mortgage process instead of a financial institution (Bank or Mortgage lender), Buyer signs a promissory note to the seller which spells out the terms of the loan including interest rate, repayment schedule, consequences of default, term of the loan. This is good for people who do not qualify for a traditional mortgage, still providing them the opportunity to home ownership.

Seller Financing agreements are usually short term and typically amortized over 30 years but with a balloon payment due in about 5 years. The idea is for the buyer to have enough equity in the house and time to improve on their financial situation to qualify for a traditional mortgage loan before the term of the Agreement.

Example of a Seller Financing Agreement:
$5000 down payment to seller x for 5 years x Amortized over 30 years x Balloon balance in 5 years. After the 5 years you obtain a traditional mortgage and pay off the seller and take complete ownership pf the house.

Always get a qualified Real Estate Attorney with experience in structuring Seller Finance deal.

Advantages of Seller Financing to the Buyer:
1- Alternative to traditional financing
2- Few or no closing Costs
3- Fast Move in (Close within a couple of Days)
4- Flexible amount for Down payment
5 - No Mortgage discount points
6 - Build Equity in the house

Advantages of Seller Financing to the Seller:
1 - Quicker and cheaper than traditional mortgages
2 - Make more money, No Commissions ( No Real Estate Agents involved)
3- Property may sale at a higher price considering Down payment premium
4 - Help defer capital Gains Tax
5 You may sell promissory note to an investor for a Lump Sum (More Money)
6 - Potential to sell the house without doing repairs
7 - More money with charging Buyer higher interest rates
7 - You retain Title and if Buyer defaults, more money for seller

Seller Financing could be a win/win for Seller and Buyer, but Buyer must do their Due Diligence to benefit from this home ownership alternative.