You will start dealing with complicated financial and legal obligations the day you decide to buy a home and take the plunge into the housing market. While dealing with these obligations – from obtaining a mortgage to getting through the closing process, you’ll run into all sorts of professionals such as relators, lawyers, home inspectors, mortgage brokers, appraisers, title inspectors and accountants (Related article: 5 key players in a home buying team that you must know about). The problem is: they’ll use such complex language and frequently throw such alien terms at you that you will often draw a blank and can’t help but wonder what the hack they are taking about.

Here at Buyer Investor Match, we help credit-challenged people buy any home they want with owner financing. We repeat the same process in every deal and enlist the services of our own team of professionals (that has gained expertise in our ‘no credit check – no income verification’ financing program) to reduce the stress otherwise involved in the process for home buyers. We provide free training to them so that they are aware of their obligations and feel comfortable while dealing with the legal and financial matters related to buying a home. It helps them cope with the learning curve easily.

There will be a lot of things you will like to understand when buying a home, but one document that we specifically emphasize on is the promissory note. In our Buyer Investor Match program, an investor will owner-finance a home to you, in other words, you will borrow from that investor, instead of a conventional bank. You will sign a promissory note when taking out the mortgage. Here are a few important things you should know about this document:

What is a promissory note?

As the name suggests, a promissory note is a promise to the investor that you will make monthly payments on time and as per the terms agreed upon in the note. Some of the most important details, a promissory note contains are as follow:

• The monthly amount that you will pay to the investor. It will include principal amount and interest.
• The date when the monthly payment is due.
• Type of mortgage – whether fixed rate or adjustable rate. Under our program, buyers get the opportunity to lock the interest rate. In other words, you can take out a fixed rate mortgage.
• The length of time for repayment. It can be customized, but in general, it can be up to 30 years in our owner financing arrangement. This is contrary to the common practice that most sellers follow. They will extend credit for a short period of time, but under our program, the amortization period could be as long as a conventional lender allows.
• Balloon payment that you need to make after a certain number of years, for example five years. While including a clause requiring the borrower to make a balloon payment is a common practice, a great advantage of our program is that home buyer doesn’t need to make any balloon payment.
• Pre-payment penalties that you will be charged if you pay off the debt ahead of time. Many sellers impose this condition, but there are pre-payment penalties under our Buyer Investor March program.
• Whether you can refinance or note. Under our program, the promissory note allows the buyer to refinance with a conventional lender any time he or she wants. Related article: Refinancing your mortgage in owner/seller financing: Is it possible?

The role of a note servicing agency

We enlist the services of a note servicing agency to help buyers make monthly payments on time. You will pay your monthly installments to the note servicing agency which in turn pays the investor who extended credit to you. They charge a small fee –about $35 per month – to ensure that both the parties comply with the terms and conditions specified in the promissory note.

Interested in learning more about our program which helps people buy homes without any credit check and income verification? Just click on the GET STARTED button below to set an appointment with us using our online scheduler: