Understanding Seller Financing in Real Estate can be really confusing, we are here to help you understand!
So you do not meet the standards for conventional financing? Maybe you have had student loan issues or a run of bad luck and imperfect credit, you are not alone, but you also do not have to continue to pay rising rents. Hi, I’m Kimmy Rolph and rents are expected to rise 7% this year alone. If you are in a steady job, have saved for a down payment, and want to explore owning your home, seller financing could be an option. Keep in mind that the supply on The Main Line is incredibly limited and sellers are getting about asking price with conventionawhat they are asking with conventional financing and cash offers. Still, this is an option you should know about. There are a number of sellers who would enter this type of financing, and it can be very affordable for a buyer. Here are some of the details on seller financing and how to obtain it.
So what is a seller-financed transaction? In residential real estate transactions seller financing is when the seller finances the purchase for the buyer. Seller-financed transactions can be quicker and cheaper than conventional ones, however, buyers need to confirm the seller is free to finance (they have no mortgage or their mortgage lender allows it). Buyers should be prepared to make a big down payment because this makes your offer more attractive to a seller. Another advantage of Seller financing is that it typically runs for a shorter period than a traditional mortgage. As a seller, you may want to take advantage of the shorter period and accrued interest than a traditional mortgage and a buyer would appreciate the lower interest.
One important thing to note is that is vital that both parties in the transaction should hire professionals to provide guidance and draw up the contract and promissory note.
If you are a renter who feels it may take ages to qualify to be a home owner, even if you have a 20% down payment, I am happy to explore the alternative types of financing. There are first time home buyer advantages, new types of financing, and conventional financing that may be available to you.
Below are my resources for buyers and I am happy to help you with prequalification for financing or at least to start a plan. Let’s take this next step together. Kimmy Rolph sells The Main Line and Local Areas.