Should you consider an Owner Financed Mortgage

If you want to buy real estate, you should consider all mortgage financing options. Why? Some options are more attractive and beneficial than other options. Most people go to a bank or a financial institution to obtain a mortgage loan. However, if a buyer finds an owner that is willing to finance the transaction, then the buyer will potentially save thousands of dollars. Reasons to consider the owner finance option include less paperwork, better loan terms and dealing directly with the seller.

First, the buyer will have less paperwork if the home is purchased directly from the seller. When someone buys a home through a real estate agent or a bank, there are many documents to sign. In most cases, the real estate agent will have the buyer complete several forms. Then, a similar process is conducted at the bank. You will have to fill out an application at the bank and an application with the real estate company. You will definitely have to get a credit report. At the closing, you will have to fill out more documents for an attorney. Why not eliminate the middlemen?

Often times, property buyers are able to get better terms and conditions on the loan with an owner financed mortgage. The best way to do this is to find home owners that are anxious to sell their property. Use the Internet as a tool to help you get started. To do this, conduct a search on the Internet with these words: “For sale by owner”. The search engine will bring up homes in your area. Contact the owner(s) that are willing to finance the home and let them know you would like to make an offer. For example, the owner is asking for $100,000 for a home. Offer the owner $80,000. Get the owner to accept a $5,000 down payment. Then, work out a monthly payment plan for the balance. The seller has saved at least $6,000 in real estate fees.

The buyer has purchased a $100,000 home for $80,000. Do you see the point? This is one of the main reasons home buyers should consider buying a home directly from a private seller. In this type of transaction, the buyer does not have to come up with an immediate $80,000 to pay for the home. The transaction is not completed. You still have to work with the owner to close the deal.

The two of you will need to hire an attorney that specializes in real estate transactions. The real estate lawyer will make sure the contract is valid and complies with the state’s real estate laws. Make sure you get a home inspection report. Then, hire an appraiser to have the property appraised. Do not be surprised if the appraiser says the home is worth $120,000. You have increased your wealth by $40,000 in a few days.