How Does Owner Financing Work?

Owner Financing

How Does Owner Financing Work?

One of the best ways to sell a home a little faster and for a little more money is to offer the home with owner financing. Owner financing allows a buyer to buy a home by, essentially, paying a monthly mortgage payment to the seller. It’s like rent, except that the buyer is really buying the home and taking full responsibility for maintenance, improvements, taxes, etc.

Selling a home in this way saves the buyer thousands of dollars in financing fees and that savings can be put directly into the buyer’s (or seller’s) pocket.

Homes with low-interest rate mortgages offered with owner financing are also attractive to people that might not be able to get as low of an interest rate on their own or in today’s mortgage market.

Any home (and mortgage) can be offered with owner financing if the right legal arrangements are made.

The disadvantage of selling with owner financing is that the buyer, like any buyer, could default on the loan. In this case, the home becomes the seller’s problem again, and the seller may have to foreclose on the buyer. If you have a fixed low-interest rate mortgage, Hippie Hollow Homes may be able to buy your home through this program or broker the sale of your home to someone else using the correct legal procedures.

It’s also a great option to explore as part of a “combination plan” to sell your home by marketing it to several buyers simultaneously (including listing it with one of our affiliates). Contact Us if you would like to discuss this further.

Questions About Owner Financing

Can someone actually assume my loan?

Probably not. Virtually all loans are unassumable, with the exception of some FHA or VA loans, which may be assumable, but are very difficult for many buyers to qualify for.

If the loan is not assumable, how can I legally sell it with owner financing then?

There are actually several ways to do this, however, it gets a little complicated depending on your loan and situation. Also, new laws in Texas put restrictions on how these sales can be organized. Hippie Hollow Homes has extensive experience in these transactions and we would be happy to offer you a variety of proposals to sell your home this way. Contact Us if you would like to discuss this further.

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