Is Owner Financing a Home a good option for you?

As the broker of City Group Properties, one of an "ethical" real estate brokerages that assists clients with Owner Financing, I wouldn't want to force someone to use the owner finance option unless they absolutely needed it, and more importantly, were prepared to work on a plan to refinance down the road.

Owner Finance is a great option for people who cannot get a home loan from a bank.  It allows individuals to purchase a home although they may have credit issues, tax issues, or are self employed.  The good news is that the approval process is VERY simple and you can typically move in to your home in as little as 2 weeks.

Is Owner Financing right for everyone? The short answer is: NO. 

Owner Financing typically requires a larger down payment, usually around 20%, and also typically comes with a higher interest rate as well.  Therefore, this option should be a last resort after you have exhausted other financing options. 

BE PREPARED.  If you do choose the owner finance option, it is important that you work with someone that is on YOUR side. You want a buyer agent who understands owner financing and will set you up with a game plan to get refinanced as soon as possible. Don't trust the seller or the seller agent.  The seller agent and the seller are looking out for their interests, not yours, and this could put you at risk in one of these transactions.  If you have someone who represents you and is knowledgeable about these transactions, they can ensure the transaction is done correctly for you.

Your goal should NOT be a 30 year owner finance loan.  The interest rates with owner financing are higher, but as long as you have a game plan to refinance sooner than later, you will only be paying the higher interest rates until you refinance.

Keep in mind, there are lenders that will do special financing that might work out better for you than owner financing in some cases. Our brokerage works with a few of those lenders as well to give our clients a few more options to get financed or refinanced quicker.

So, is owner finance right for you?  If you cannot get financing from a bank, but you do have a good real estate agent working for you and create a game plan to get refinanced, then the answer may be YES!

Hope this helps. 

God Bless,

Alexander DiSaggio | Broker of City Group Properties