What Is Owner Financing?
Buying a home is a significant financial milestone and a personal achievement that’s definitely worthy of celebration. The path to homeownership looks different for every person, though, and there are various ways you can go about purchasing a home. One of the most common choices when you need a loan to buy a home is to obtain a conventional mortgage — which involves borrowing money from a bank to cover the cost of the property. Instead of turning to the bank for financing, however, some buyers opt to purchase homes through owner financing.
In an owner financing situation, the seller takes the place of the mortgage lender — and it can be a great option if you don’t qualify for a traditional mortgage. Before you decide to purchase a property that’s owner financed, however, it’s important to learn the basics, including how owner financing works, how these deals are structured and how to determine if one is the best option for your financial situation.