Seller financing may be an option for those who do not qualify for traditional financing due to a low credit score or an insufficient downpayment.
Reasons a seller may choose to offer financing:
- Earn a low risk fixed rate of return over a set period of time
- Condition or type of home does not qualify for traditional financing
- Seller owns the home free and clear of a mortgage
Benefits and risks for a buyer:
- Seller financing allows buyers who might not be able to secure a mortgage to buy a home. A seller might approve a buyer even if a bank or other traditional lender denied the loan.
- The closing process is faster and costs less.
- The down payment is negotiable.
- The interest rate may be higher than a traditional mortgage.
- Need to ensure you can pay the balloon payment if applicable.
If you are interested in seller financing, our Real Estate Advisors can research our proprietary database to locate these hard to find properties, and assist you in negotiating the best terms for your situation. In addition, our CPA can advise the tax benefits of seller financing vs selling or purchasing outright.