The majority of people finance their home purchase with a mortgage. Their first step is to approach conventional lenders, but here is when many of these prospective buyers come to face a harsh reality: Their mortgage applications are turned down. A lack of credit or employment history, lack of social security number, identity theft and self-employment are some of the reasons cited for this denial.

These buyers now face the insurmountable challenge of obtaining a home loan. If you too have found yourself in a similar situation, your best option is owner financing. Under our Buyer Investor Match program, we work specifically with credit-challenged buyers. We have helped hundreds of people like you realize their home ownership dream with owner financing.

Here are four benefits of buying a home with owner financing:

A great option for those struggling with credit challenges

Owner financing is probably the best option for those who can’t qualify for a mortgage from banks. In an owner/seller financing arrangement, you directly borrow from the seller. In exchange, you put the property as collateral, just like you do when taking out a mortgage from a conventional lender.

As already mentioned, most banks follow strict underwriting norms for reviewing mortgage applications. Even if you are financially capable of buying a home, the lender may reject your home loan application. In that case, owner financing can help you realize your home ownership dream.

Faster closing

The mortgage application review process can take several weeks. You will first get pre-approved. The lender will then verify all the documents and ask for an appraisal. You’ll have to deal with many formalities and a lot of paperwork before the funds are finally released on the closing day. On the other hand, things move a lot faster in an owner financing arrangement. All you need to do is sign a promissory note. It leads to a faster and hassle-free closing.

No uncertainties

When you are taking out a mortgage from a bank, anything can go wrong at the last moment. Let’s say for example you bought a new car after getting pre-approved from a lender or changed your job, your credit score will drop. In that case, your lender may reject your mortgage application (even after you got pre-approved) or lower the loan amount you can qualify for.

In a seller financing arrangement, there are usually no such uncertainties. As already mentioned, once you sign a promissory note, everything is on the autopilot.

Flexible loan terms

A conventional bank will make you follow certain rules for repayment, refinancing, amortization period etc. But the buyer and the seller can customize the promissory note and come up with a repayment plan, default consequences or balloon payment as per the agreements reached between the two parties.

Cheaper closing

In a seller financing arrangement, you don’t have to pay any processing fee and other charges usually associated with taking out a mortgage from a bank.

In conclusion

The common arguments against an owner financing arrangement are as follow:

• You have to make a balloon payment
• You can’t refinance
• There are pre-payment penalties
• And, you have to pay off the loan quickly, usually within five years.

But what if there is a program that requires you to make no balloon payments, you can refinance any time you want to, there are no pre-payment penalties and you can pay off the loan in 30 years. Sounds great, right?

Well, this is what our Buyer Investor Match program offers to credit challenged buyers. Interested in learning more about this program? Just fill out the form below to set an appointment with us using our online scheduler: