How does owner financing work?

Guest

We have been leasing a home for over a year, we put 10,000. down and are now going to use the owner finance option.

How does this work? The seller wrote up a contract through a "friend" with a title company but it seems to me the bank holding the mortgage should be involved. What do I need to do, or what should I be looking for? What are the usal steps?

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.07 Dollars($)

I would have your attorney take a look at it just to make sure the contract is not one sided. The title company will record the note and mortgage just like a mortgage company would. Instead of paying a mortgage company you are paying an individual.

Im not sure about a couple of the questions that you had about the bank being involved so please clarify a couple things. Is the owner financing just a portion of the financing? Is there a bank that will be holding a mortgage in addition to the owner financing? Please be more specific so that I can answer more clearly for you.

gmakerley · Posted: Mon Jan 14, 2008 9:35 am Post subject:

by all means, get legal representation here.

i agree, lisa, that the reference to the bank is confusing. we need more information on that to make a reasoned suggestion.

jheard · Posted: Mon Jan 14, 2008 1:34 pm Post subject:

The seller will sell you the property by executing a Warranty Deed to you. The seller's mortgage will have to be paid off by the seller. You will give the seller a Promissory Note secured by a Deed of Trust (mortgage) on the property. Pay the title company to handle the details for you.

larry · Joined: 27 Jun 2007 Posts: 3328 474.49 Dollars($)

Hi chaos,

Welcome to the forum.

Owner financing is when the owner finances his own property instead of the buyer and the buyer will pay a certain amount every month to the seller/owner.

As far as the contract is concerned I think you should check it by your attorney so that contract doesn't become one-sided.

Feel free to ask if you have any further questions.

Best of luck,
Larry

Guest

who will have to pay the INS/taxes

Guest

Hello Tina.

The buyer will have to pay the Taxes and insurances in Owner financing/seller financing because after buying the house the buyer becomes the owner with the obligation to pay the previous owner.

brian1 · Posted: Thu Jul 24, 2008 7:52 pm Post subject:

Be careful
It is a common con for someone to sell owner financed when they have a mortgage on a property then stop making the payments and pocket your money. This leaves you sitting in a home when the sheriff comes knocking with no place to live and a timeline to move.

I just read this exact scenario on a different forum and the person was stuck in a really bad way.

Good Luck
Brian

Guest

i own a home free and clear. I am willing to sell it with owner finacing, how much should they put down and what percent should I charge for intrest. I plan to have a title company draw it up. Would like any advise

Thanks Linda

smithsussane · Posted: Tue Sep 30, 2008 12:05 am Post subject:

Hi Linda!

Welcome to Forums!

Owner financing is a popular option these days. The down payment for the house will depend upon the cost of the house and how much you want them to pay. The interest percent is totally your discretion.

Yes, definitely take the help of a title company to draw up the plans for you.

Feel free to ask if you have further queries.

Sussane

Guest

Can anyone who own a home finance it to an individual interested in buying that home.

Guest

What are the qualifications which a homeowner must have in order to finance his home?

Niicss · Posted: Fri Oct 31, 2008 3:08 am Post subject:

Hi Gloria Parker!

I haven't heard anything about qualification of a home owner in case of owner financing. But there are certain things which both the owner and buyer should remember while owner financing. You will have to maintain the legal docs so that neither the owner nor the buyer faces any problem in future.

Thanks.

gmakerley · Posted: Fri Oct 31, 2008 6:23 am Post subject:

there are agencies who specialize in assisting property sellers in arranging owner-financing...perhaps they assist buyers with questions, as well.

the best overall bet for anyone contemplating such a thing - whether buyer or seller - is to engage legal counsel. neither side would want title issues to encroach upon the deal. my basic suggestion, seek out a lawyer who would, we hope, be familiar with owner financing so as to be fully protected.

Guest

my boss has offered to sell me the business i have worked at for 3 years and adore with owner financing.

if i would be responsible for the rent, utilities and the mortgage payment to him, where would my own personal rent, etc come in to play. or would it?

thanks

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