Selling your house can be done by you n a number of different ways. Whenever you are looking at options then it is you that can choose to opt for an owner financing. Once you will be looking at this one then you can have once your buyer will not be able to secure a loan. Choosing this one is an option that you can have once the buyer doesn’t have any cash on hand.
If it is an owner financing is what you will be choosing to have then you will need the buyer to proved you with a down payment. Whenever the buyer will default then it is the down payment that will be the money that they will be willing to lose. It is you that can choose to set the down payment at around from 5-20% or more.
The interest rate is also another factor that you should know once you will be choosing an owner financing. Whenever owner financing is what is done then it is also the one that will let the seller dictate the interest rate that they want to have. If there is a very high interest rate that the seller will have then the buyer might get discouraged. An interest rate that is between 5-7% is what the seller just have. Once the seller will be choosing this one then they can top for a higher down payment like 20% or more.
See to it that you will know more about balloon payment once you will be choosing to do balloon payment. It is this one where you can amortize your loan for over 30 years. You can then include the balloon payment at the end of 10 years. It is the 10 years that can help the buyer improve the financial situation that they have.
Once it is an owner financing is what you will be choosing to do then it can benefit the seller. Once it is an owner financing is what will be done then the seller will be able to get monthly income, the installment payments from the buyer increase your monthly cash flow, ask for a higher interest rate, get a higher sales price, If the buyer defaults, you keep your house, the down payment, and any extra cash, sell and close fast here since there’s no mortgage process, and you can also sell your house without making costly repairs.
The buyer will also get some advantages from this one which is a faster process, no bank loan process to approve the application, offers a cheaper closing, no extra fees including bank fees and appraisal costs and provides a flexible down payment.
The seller might not have the option to offer balloon payments. A lawyer can advise you to go through the foreclosure process which can happen if the buyer defaults, you may end up paying for repairs and maintenance costs. And these are the advantages of an owner financing.
An owner financing is also the one that will give the buyer some disadvantages as it can lead to higher interest rates, the interest rates are usually higher than the bank loan interests, the buyer needs the seller’s approval, if the seller has a mortgage loan, the bank can demand immediate payment, the buyer can either pay the debt in full or go through the foreclosure process.-check out these tips