Zero Or Low Interest Payments Using Seller Financing

By Roy Owens

Seller financing is especially advantageous to first time home buyers, or to buyers who are having a difficult time getting a conventional loan. It is a good idea for buying Dallas investment property, as the interest rates are generally lower, and there is no hassling with financial institutions. Sell or refinance anytime without prepayment penalties. We encourage you to build your credit and refinance for an even lower payment. Sellers that do a fair amount of owner financing tend to like to make it more of a standardized process. These sellers of owner financed homes typically will take the current going 30 year fixed rate and put a spread on it.

Sellers want a fast closing with little hassle. Sellers also want to pay as little taxes as possible on the gains incurred. Sellers are anxious to sell; and in a sluggish real estate market, owner-financing is an attractive alternative to losing money while properties sit vacant. Otherwise, homes can remain on the market for years with owners either making mortgage payments out of pocket or renting. Sellers may consider 100% owner financing or partnering with the right buyer of Dallas investment property for a win/win outcome.

Seller financing can give sellers the advantage they need to overcome a key purchasing hurdle, opening their property up to more potential buyers. Sellers and their agents often express the attitude that the Buyer's financing is the Buyer's problem, not theirs. Perhaps, but facilitating Buyer's financing should certainly be of interest to Sellers. Sellers can also contribute up to 6% of the sales price to help cover closing costs. This allows many 1st time home buyers (or seasoned investors) to purchase a home with little or no money down.

Seller financing is able to circumvent the many issues that are related to the tests that lending institutions put buyers and sellers into. The terms and conditions have to be decided and agreed between the buyer and the seller, where up to 50-60% of the selling price is financed by the seller (sometimes more). The interest rates are generally below what banks are currently offering. There are some rules and regulations that need to be taken into account. If the property is not allowed as per the master association for the property, the seller cannot offer seller financing to the buyer.

Seller financing is a loan in which the buyer assumes the seller's mortgage while the loan stays in the seller's name. The buyer becomes the owner of the Dallas investment property when the seller signs the grant bargain, sale deed, or other specific device to transfer the property. Sellers that have built up equity in their home usually don't feel like waiting around 30 years to see a return on their money come out of the investment property. For these situations the interest is often set up on a balloon payment. Sellers also want to pay as little taxes as possible on the gains incurred. In numerous cases, the seller can have most of his needs satisfied by an installment sale rather than a conventional cash sale. - 23196

About the Author:

Roy Owens is an investor who uses Dallas investment properties to make a living. He also helps individuals with retirement investing.