The Ins And Outs of Seller-Financing

Are you a potential home buyer having trouble securing financing? Are you a homeowner who wants to sell but is having trouble finding a buyer?

As a buyer, getting a mortgage can be difficult if your financial situation doesn't fit into neat little boxes — a predictable salary that can be documented with paycheck stubs and W-2 forms, a stable employment history with no interruptions and a gleaming credit score. And as a seller, closing a deal on your home can be difficult if borrowers are having trouble getting approved for loans. Wouldn't it be great if you could take out the middle man and find another way to complete the transaction?

---

In this blog, we'll focus on a little-known option—seller financing—that can help you buy or sell a house.

How Does Seller Financing Work?

Seller financing is just what it sounds like: instead of the buyer getting a loan from the bank, the person selling the house lends the buyer the money for the purchase.

The buyer and seller execute a promissory note providing an interest rate, repayment schedule, and consequences of default. The buyer sends his monthly mortgage payments to the seller, who gets to earn interest on the loan, perhaps at a higher rate than he could get elsewhere. If the seller chooses to sell the loan, the buyer will send the monthly mortgage payments to the investor who purchases the loan.

Seller financing has many advantages for buyers:

1. The closing process can be faster.

Prudent buyers and lenders will always use the closing period to perform their due diligence. But with seller financing, the closing process can be faster.

2. Closing costs are lower.

Sabur with DeMary Funding Company states, "Buyers love [seller financing] because they can get in the home for less money. They do not have to pay the bank fees and appraisal costs."

3. The down payment amount can be extremely flexible.

Contact us at 757-510-0042 or info@demaryfunding.com to learn more about Seller Financing.