Finance for Buying Property - The Latest Trend of Owner Financing


Owner financing is the newest trend in property sales. It is easy to understand how it takes place. There is no third party involvement in this arrangement of finance. The seller decides everything and comes to an agreement with the buyer. This way, decisions are taken quicker and the payment is made easier. The only downside is the risk factor involved with the seller. However, good scrutiny of the status quo of the buyer could reduce it to a great extent. The number of transactions taking place on this method is evidence for its popularity for selling property.

One of the biggest advantages of this type of finance on property transactions is the ability of a person having a poor credit score to purchase a house. With this method a seller could agree to sell his property to one who has a bad credit record. Since the seller is doing the evaluation in private he could consider the factors that led to the poor credit score and come to a conclusion. This type of transaction will never go ahead on any other type of home financing. If the seller does a careful evaluation of the buyer's credentials, the risk also could be minimized to a great extent.

When a seller wants to get rid of the property quickly for a good price, making his own finance available for the buyer is the best way to get good results. A transaction that could take months with conventional methods could be closed in a few days as the seller will personally do the evaluation. Besides, by selling his property quickly he will also get better returns because he could dictate terms on which the sale is made. The buyer in turn may agree to pay a bit higher interest rate as it is a direct deal.

Usually, when finance facilities are offered in a property transaction, the period covered is about five years. During the five years the buyer may find it difficult as he has to pay a higher installment and interest payment every month. But he has the consolation that he owns the house in just five years. In case he wants a bulk sum of money after the completion of the final installment he could easily get a refinance deal on the conventional way. This way a buyer could be better off when he buys a home on an owner financing deal. The sellers in turn are better off as they are able to dispose of their properties quickly with lesser hassles.

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