owner financing top bannerowner financing top banner
Owner Financing Land News
Benefits of Owner Financing for Your Land Purchase
by Geoff Hurdle
Hurdle Land & Realty, Inc.
Buying land is a substantial investment, and many first-time buyers aren’t aware of all their financing choices or may feel intimidated by the process. There are a variety of options when it comes to financing property, but the traditional forms may not always be viable. Have you heard of owner financing? Are you aware of the benefits? Read on to learn why owner financing your land purchase may be your read more…
It might seem out of the ordinary for a buyer to ask a seller to help buy their home. It is actually a quite common occurrence for a seller whose home is not selling or buyer who is having trouble with traditional lender guidelines. Owner financing is also popular in local real estate markets where the scene is a buyer’s market.
So, what is owner financing, you may ask? Owner financing is when the current homeowner puts up part or all the money required to buy a property. To make things simple, the buyer is borrowing money from the seller instead of taking out a mortgage with a commercial lender. Buyers can choose to fully finance a purchase in this manner or combine a loan from the seller with one received from a banking institution.
When it comes to owner-financing, there are benefits for both buyers and sellers.
Buyers who choose owner financing can reap several advantages:
- When it comes to owner financing, there is little or no qualifying.
- Buyers and sellers can choose from a variety of loan repayment options or a combination of them.
- Without an institutional lender in the picture, there are no loan or discount points, origination fees, processing fees, administration fees, or any other assorted miscellaneous fees that lenders routinely charge which in turn leads to saving money on buyer closing costs.
- Buyers and sellers can select from a variety of the following loan repayment options: interest-only, fixed-rate amortization, less-than-interest, or a balloon payment (if your state permits it), or even a combination of these options.
- Down payments are negotiable.
- There is quicker possession without an institutional lender involved.
Sellers who decide to opt in for owner-financing reap multiple benefits, as well:
- The sales price can be higher since the seller is offering the financing. He or she can command full list price or higher.
- The seller may pay less in taxes on through an installment sale, reporting only the income received in each calendar year.
- Payments from a buyer increase the seller’s monthly cash flow, creating spendable income.
- An owner-financed loan can carry a higher rate of low-risk types of investments.
- Offering owner financing is great way to make a quicker sale. It can draw in a different set of buyers on a property that has been difficult to sell.
As advantageous as it can be, owner financing is a complex process. Let LandHub.com guide you through every step of the way. We thank you for your interest in our services as you sell your land and land your dream.