Owner financing in Texas explained with examples - Buyer Investor Match

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Owner financing is a great way of buying a home, particularly if you are credit-challenged – unable to secure a mortgage from a conventional lender.

For this reason, an increasing number of prospective home buyers in Texas are discovering this option and fulfilling their home ownership dream without any hurdles.

But the question is: should you buy a home with owner financing?

Well, let’s take a look at a hypothetical situation when owner financing in Texas is a perfect fit for buying a home:

Conventionally, you would want to take out a mortgage from a conventional lender, but let’s assume you are facing one of the following challenges:

  • Your credit score is not good enough to get a mortgage from a bank.
  • You are self-employed and can’t prove your income.
  • You are a foreign national and as a result, banks are turning down your mortgage application.
  • You don’t have a social security number.
  • You are a victim of identity theft.

You will have a hard time convincing a conventional lender to approve your mortgage application in these situations.

Meanwhile let’s assume you have found a home with an asking price of $200,000. Now one of your options is owner financing. In order to buy that home with owner financing, the seller should ideally own the property outright, meaning that the property should be free of any debt. Most importantly, the seller should be willing to extend financing to you.

The problem is that most regular sellers don’t want to owner finance homes because under this arrangement, they don’t get full proceeds on the closing day. Some Texas-specific legal requirements such as T-S.A.F.E. that imposes a licensing requirement on certain types of owner financing also become a hurdle.

But let’s say you’ve found a home that the seller owns outright and is willing to owner finance.

In this arrangement, you will borrow from the seller and pay a monthly installment to him or her. You can fully customize the owner financing contract, so you and the seller can negotiate interest rate, down payment amount, amortization period, mortgage type etc.

The installment will include principal, 7% interest rate for a fixed 30-year-loan and a small fee payable to a note servicing company. If the amount financed is $200,000, your financial liabilities will look something like this:

Amount Financed:  $200,000

Interest Rate: 7%

Number of Payments:   360 (30 years worth of monthly payments)

Monthly Payment (Principal and Interest): $1330 (approx)

Total of All Payments to Seller:   $478,800 (approx)

Click the following link to read our complete guide on owner financing in Texas: Owner Financing in Texas: A Complete Guide [The 2018 Update]

Owner Financing Program by Buyer Investor Match

Buyer Investor Match is a program specifically designed for credit-challenged home buyers. The program enables these buyers to buy ANY home they want. It is designed in such a way that it eliminates requirements such as finding a home in Texas that the seller wants to owner finance or he or she should own outright.

Under our program, you go on home shopping just like a regular buyer getting mortgage from conventional lender does and can buy ANY home. An investor from our network buys that home in the traditional way from the seller and owner finances it to you.

If you are interested in learning more about our program, hit the ‘GET STARTED’ button now.

3 Steps to Homeownership

With No Credit Check or Income Verification
1
SCHEDULE : · Schedule a time to meet with us and learn how our proven system works.
2
PICK : · You pick any home you want, even a brand new home.
3
RECEIVE : · Get the keys to your dream home and a deed in your name with as little as 15% down.
Araceli and her family relocated from California. Self employed and unable to qualify for a loan, they used our program to get owner financing on a brand new home.
Araceli

Three Steps to Homeownership

SCHEDULE : Schedule a time to meet with us and learn how our proven system works.

PICK : You pick any home you want, even a brand new home.

RECEIVE : Get the keys to your dream home and a deed in your name with as little as 15% down.