Purchasing A Home Having Bad Credit Is Even Now A Possibility

 Can you believe more than 55,000 homes in the United States have been purchased using owner financing this past year? With the excessive rate of home foreclosures, national financial problems, in conjunction with more stringent lending practices there are a lot less home buyers with good credit looking to buy a home or upgrading to a bigger home. Homeowners that wish to sell their home need to find other ways to recoup their loss funds and offering seller financing when trying to sell their home may be a very good option in our current market.

Even though the risk of owner/seller financing is considerable and truly an act of trust, this is certainly an opportunity with the assistance of a knowledgeable real estate professional along with a real estate legal professional. Each persons, the seller and home buyer can sit down and negotiate a good contract that will work out for both parties.

Many sellers concentrate on those property owners that experienced a home foreclosure due to extenuating conditions while other sellers aren’t that worried about credit problems or exactly how your financial troubles came about. All they are concerned about is that you can make the monthly payments without any problems.

Generally in most cases owner/selling financing continues to be less expensive than leasing or renting a home or apartment.

What Are the Advantages of Owner/Seller Financing?

1. Absolutely no Closing Costs. Owner/seller financing home sales never had any of the normal fees that banks and lending institutions addon, as for example, mortgage insurance premiums, discount points, origination fees, or any other kind of fees they can legally addon to your mortgage.

2. A seller/owner financing transaction or closing can occur a lot faster.

3. There is certainly a lot more flexibility. Sellers and buyers can negotiate much better interest rates and down payment. Even though conventional financial institutions could be very firm on a 20% down payment, you might be capable of combining a number of balloon payments that will equal the 20% down payment over a given period of time.

What Are the Disadvantages of Seller/Owner Financing?

1. Owner/seller financing may be costly. The typical home loan interest rate stays around 5 %, although with seller financing you could possibly pay an 8 % or more interest rate.

2. The interest rate might not be a fixed rate. You could possibly end up with an adjustable rate, naturally must be written within the contract.

Even though owner financing might be costly, people that have bad credit histories may still be able to get into a home that they can eventually own.

Always remember, sellers are taking a huge risk and need something more for not having the ability to cash out on the property immediately as they could do in a conventional sale. The important thing here is to make a deal that is acceptable with fair terms for both parties in the transaction can live with.

Two key components that each of the parties will be needing are a knowledgeable, experienced realtor and a real estate lawyer which will represents each party individually.

Seller/owner financing could be an excellent tool for people who find themselves unable to receive approved for a conventional loan. Make sure you are ready for the journey.