Owner Financing

[Lawrence Robertson]

Hello everyone. Could someone please explain owner financing to me. I think I have a basic idea but I need the whole picture. Thanks

[Carrie Jones]

Hey Lawrence, I broker owner financed notes for a living to investors.
Owner financing aka, seller financing or sometimes "owner will carry" is a promissory note created by a homeowner who owns their home free and clear who wishes to sell their home on terms to a buyer. However, some people offer owner financing with a unpaid balance.

The traditional method would require the borrower to obtain traditional financing from a bank to purchase the house 100% from the seller.

Think of owner financing as a layaway plan.

Example:
Purchase Price: $100,000
Down Payment: $10,000  ( Should be 10%)
Note Balance: $90,000
Interest: 7%   ( Would be higher for borrowers with bad credit)
Term: 15 years    ( Keep the terms below 30 years)
Payment: $808.95   (Verify Ability to pay including taxes and insurance)

In essence, Owner Financing allows the homeowner who is selling to become the bank. Don't forget to run a credit check on the borrower and verify their ability to pay per changes in DODD Frank.

You may wish to google "Seller Finance Consultants" and download a FREE Dodd Frank compliant disclosure to include in your owner financing paperwork.

Please read ----> Home Selling Methods Banks Do Not Want You to Know About:
https://www.linkedin.com/pulse/home-selling-method...