Owner financing on real estate

The Benefits of Buying or Selling a Home with Vendor or Owner Finance

06/16/2011

By: Caroline Edson

Vendor Finance or Owner Finance simply means the seller is helping the purchaser to own the home. The Vendor/Owner can provide finance for part of the amount or at times even the full amount based on the buyers needs and the sellers sale requirements.


Vendor Finance or Owner Finance helps buyers, who may have been declined by the bank for various reasons to get a loan to own their own home.

Vendor Finance or Owner Finance is a stepping stone forward to assist a buyer to own their own home now.

One of the major advantages of Vendor Finance or Owner Finance is the repayment period can be extended as per the requirement of the Buyer. For instance, if the Buyer needs say 12 months for their credit history to be suitable for applying for a bank loan or if the Buyer needs say 12 months to save for a bigger deposit.


The repayments on the home are traditionally Principal and Interest, however the Owner and Buyer may agree to Interest Only payments. Whichever way, the balance is payable to the Owner when the Buyer gets their bank loan.


The terms of the Vendor Finance or Owner Finance are provided in the paperwork. All details in relation to the loan such as interest rate, repayments, terms, time frame etc are provided in that paperwork. Instead of making payments to the bank, the buyer is simply making payments directly to the owner for a period of time.
This is totally different to a Rent to Own Home. In a Rent to Own Home, the tenant/buyer Rents to Own the Home for a period of time and at the end of the agreed time frame they are to get a bank loan to own the home.

With Vendor Finance or Owner Finance, you become the owner of the house with the help of the owner who offers financing immediately. In other words the Home comes with Finance in place. Whilst the Owner retains Legal Title, the Buyer has Equitable Title and the Title transfers directly to the Buyer when the Buyer refinances with their own bank loan and pays the Vendor/Owner the balance agreed to in the paperwork.

Unlike banks, Vendor Finance or Owner Finance is flexible - in other words, a Buyer’s requirements can be agreed to. The ultimate goal is to help the Buyer and free them of their financial limitations. The loan period will be agreed to between the Buyer and Seller and is dependent on what the Vendor/Owner is willing to offer due to their own requirements.

You will normally find that a specialist will assist with your purchase of a Vendor Finance/Owner Finance Home. The specialist must be Licensed - they must have a credit providers license. This was brought in on the 1st July 2010 with the new National Consumer Credit Protection Act to protect both Buyers and Sellers.



C.J.F. & Associates has made this information available, and we hope it has helped you! If you need cash for a Privately held Real estate note, Structured settlement, Annuity, or Structured Lottery payments, call us at 1-800-908-9312 or go to our website at www.cash4you123.com for more information.





Author Resource:->  A.R.E. (Anything Real Estate)


Vendor Finance Lawyer

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