In today's economy many buyers are having a very difficult obtaining financing for homes from the banks. Banks are being very cautious and they are just not lending if you have any credit issues or do not fit the profile of an owner-occupied buyer with a regular job that you have been in for a long time and no other home. Seller financing, also know as owner carryback financing, may be your only option for buying a house.
At the same time sellers are having a tough time selling their homes because of tight lending. They need buyers and the banks to get their house sold and be able to move on. Life goes on. Seller financing is a good tool for them too.
Who are these buyers?
- Anyone who is sellf employed.
- Anyone trying to buy a second home.
- Anyone with another property to sell.
- Investors who own other rental properties.
- Someone who has a new job.
- Someone who has had a bankrupcy.
- Someone who was way upside down and left their prior home to get out from under it.
- Someone who has had credit issues because of medical problem.
- And, of course, anyone who can't ontain financing because of poor credit and the mishandling of their lifestyle and finances in the past.
All but the last group may have good income, a solid job, financial resources, and a change in their health for the better that allows them to be the same solid citizens they were before getting ill. They are capable of making their payments on time and for the length of their mortgage. These people are the buyers that are a fit for buying a home with seller financing. If you are one of these people we can definately help you buy a home.
Around half the bankrupcies in America are related to medical problems. It is not the fault of the injured or sick person. It is a fault of our broken health care system to a great extent. Not everyone is covered. Not everyone can get coverage. Pre-existing conditions may not have been covered under your policy. In the current economy a job loss may lead to an extended period of time without coverage. Isn't that the time things always happen?
What is seller financing? It is the seller of a property acting as the bank at the time they sell their home. That seller will earn little interest on the cash they get out of the sale just putting it in savings. They may even want the monthly income and the deferred income for tax purposes.
How does it work? The seller reviews the credit report of the buer to see why they need this type of loan. They have the right to refuse the loan just like a bank would. But they do not have the tight guidelines to follow and may elect to grant the loan to the buyer. If the buyer and seller agree on the loan, the escrow company acts as the account servicing agent for both parties and handles the payments. There is a small fee that the buyer pays. The buyer is assured that their payments are credited toward the purchase. The escrow company also can collect the taxes and insurance monthly just like a regular bank mortgage payment does. The down payment requirement is based on the credit and reason for the seller financing but will be at least 10% to 20%.
The buyer may just need tome to be able to fit in the box of a regular bank loan. Maybe they need more time in their job or need to get a bankrupcy further behind them. Their money may be tied up in a certificate of deposit. They may be expecting a large inheritance or payoff in the future. They may need to sell their existing home. Seller financing can bridge that time frame. The payments may be make as though the loan was for 30 years but the balance may need to be paid off with a balloon payment in 3 or 5 or 7 years. At that time you, the buyer, should be in better position to get regular bank financing. You may be paying a higher interest rate. But anyone who is at all outside the box with a bank also pays more for their loan. But there are savings too; no big fees up front or rolled into the loan total and no required appraisal or related fee. Any you can buy a property that may not be able to fit a typical bank profile too such a land or a manufacture home.
See http://allofprescott.com/seller-financing-for-buyers-and-sellers/ for a blog post about seller financing from a seller prospective too.
So there is a solution for all those who are outside the box for obtaining a mortgage. Seller financing is the key. We are experienced at structuring these arrangements in Prescott Arizona. We have the team of agents, inspectors, escrow officers, and accountservicing departments to put all the pieces together for you. You can own a home and not have to pay rent and a landlord's mortgage. we can help you rebuild your life. Just give us a call.
Jerry Germansen and C'Ann Simpson, Associate Brokers eXp Realty in Prescott Arizona
928 632 3906
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