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1. Can sellers provide seller financing while having a mortgage on the property?

The general answer is no, unless the seller has an assumable mortgage. In most cases seller has to have a clear title with no liens to be able to sell the property with owner financing terms.

2. Is there a difference between seller financing and owner financing?

No. These terms can be used interchangeably.

3. Is there any difference between lease option, rent to own, lease to purchase, and owner carry back?

Nope, it's all the same.

4. What are the advantages of owner financing to the buyer?

There are several:

a. Since there is no bank involved, generally small qualification guidelines. Sellers can approve the buyer based on their own judgement because the loan is secured by the property itself.

b. Sellers generally do not charge for mortgage points and origination fees. In addition there is no required appraisal, survey, and a host of other fees that the bank is going to bombard you with.

c. The mortgage of an owner financed property will not appear on your credit report and will not affect the credit score.

d. Given the increase in stringent loan standards after the recent catastrophic events with the sub-prime mortgage lenders many buyers will no longer be able to qualify for a loan under the new standards. Therefore, owner financing will play a bigger role for the years to come.

e. In case if the buyer fails to pay as agreed and therefore faces foreclosure, it might be easier to deal with the seller than a bank in effort to possibly return the property to seller to avoid foreclosure. Of course, equity in the property may be lost in doing so. [/li][/list]


Disadvantages?

a. Most sellers are unlikely to offer a 30 - 40 year loan, for many even a 20 year loan will be a stretch. Therefore, sellers usually agree to shorter term loan and/or request buyers to sign a balloon note (same as balloon mortgage) where buyers will be required to pay off or refinance usually with a different lender after a specified number of years.

b. Sellers are unlikely to send monthly statements or provide you with other customer service as often as a bank.

The hardest thing in the economy os trying to buy a house, you have o have atleast a 720 score before they'll consider you and then it's still hard becase you hve to have atleast 20% down. Wow......but the up side is with seller financed you can still get a home, easier!!! This is so great, it makes life easier anyway. and right now, it's the best time, there are so many houses and land available that you can get the home of your dreams.

d. Given the increase in stringent loan standards after the recent catastrophic events with the sub-prime mortgage lenders many buyers will no longer be able to qualify for a loan under the new standards. Therefore, owner financing will play a bigger role for the years to come.

e. In case if the buyer fails to pay as agreed and therefore faces foreclosure, it might be easier to deal with the seller than a bank in effort to possibly return the property to seller to avoid foreclosure. Of course, equity in the property may be lost in doing so. [/li][/list]


Disadvantages?

a. Most sellers are unlikely to offer a 30 - 40 year loan, for many even a 20 year loan will be a stretch. Therefore, sellers usually agree to shorter term loan and/or request buyers to sign a balloon note (same as balloon mortgage) where buyers will be required to pay off or refinance usually with a different lender after a specified number of years.

b. Sellers are unlikely to send monthly statements or provide you with other customer service as often as a bank.
Please note: although no board code and smiley buttons are shown, they are still usable.

What is the typical interest rate for owner financed homes? How are interest rates determined by owners?

How many years do owners typically finance the homes? Do owners usually require the buyers to get a loan through another financial institution within x amount of years and pay off the loan?

Just wanted to point out that FHA and VA financing do not have credit score requirements-although many banks and investors may set minimum score requirements. Also, FHA only requires 3.5% down payment, and for qualifid vets -0- downpayment would be required.

My husband and I own a rental property in TX that we have to claim on our "debt" but we cannot claim the rental income because the renters didn't sign a 2 year lease. Will this same rule apply to an owner finance?

Sounds like my kind of deal, as we are looking for owner financing with a downpayment to get out of renting and back into a modest but nice home here in Jacksonville, Florida. Our rental ends August 31, and I am looking forward to making the most of this site.

Question:

At a closing between a note buyer and seller, can a dual closing occur. That is, the seller closes their mortgage with a financial institution after closing with the buyer. You can say payoff the financial institution after receipt of the money from the note buyer. If so, can the Escrow Company execute this process? Is this legal in all states?

How low of a credit score is reasonable before the point of diminishing returns occurs for the seller? The discounted points are so great that it is a waste of time for the note finder, buyer and seller. Is there a rule of thumb?

I believe 600 or below.

Anybody been successful in purchasing a home on this site, or know anybody who has. Just curious and could use some inspiration. Thanks in advance.

Didn't see any response to this post so I will re-post it:

Has anybody been successful in purchasing a home on this site, or know anybody who has. Just curious and could use some inspiration.

I closed on a property in FL last week....

congratulations.
what type of property did u close on?
Just land, or was property on the land too.
hawkins38@vvm.com