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Buying or Selling a Home with Vendor or Owner Finance

Jul 1st, 2011
by admin.
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Vendor Finance or Owner Finance simply means the seller is helping the purchaser to own the home. The Vendor/Owner can provide finance for part of the amount or at times even the full amount based on the buyers need & the sellers sale requirements.

Vendor Finance or Owner Finance helps buyers, who may have been declined by the bank for various reasons to get a loan to own their own home.  

Vendor Finance or Owner Finance is a stepping stone forward to assist a buyer to own their own home now.

One of the major advantages of Vendor Finance or Owner Finance is the repayment period can be extended as per the requirement of the Buyer.  For instance, if the Buyer needs say 12 months for their credit history to be suitable for applying for a bank loan or if the Buyer needs say 12 months to save for a bigger deposit.

 

The repayments on the home are traditionally Principal & Interest, however the Owner and Buyer may agree to Interest Only payments.  Whichever way, the balance is payable to the Owner when the Buyer gets their bank loan.

 

The terms of the Vendor Finance or Owner Finance are provided in the paperwork.  All details in relation to the loan such as interest rate, repayments, terms, timeframe etc are provided in that paperwork.  Instead of making payments to the bank, the buyer is simply making payments directly to the owner for a period of time.

This is totally different to a Rent to Own Home.  In a Rent to Own Home, the tenant/buyer Rents to Own  the Home for a period of time and at the end of the agreed timeframe they are to get a bank loan to own the home.  

 

With Vendor Finance or Owner Finance, you become the owner of the house with the help of the owner who offers finance immediately.  In other words the Home comes with Finance in place.  Whilst the Owner retains Legal Title, the Buyer has Equitable Title and the Title transfers directly to the Buyer when the Buyer  refinances with their own bank loan and pays the Vendor/Owner the balance agreed to in the paperwork.

Unlike banks Vendor Finance or Owner Finance is flexible – in other words, a Buyer’s requirements can be agreed to.  The ultimate goal is to help the Buyer and free them of their financial limitations. The loan period will be agreed to between the Buyer and Seller and is dependent on what the Vendor/Owner is willing to offer due to their own requirements.

 

You will normally find that a specialist will assist with your purchase of a Vendor Finance/Owner Finance Home.  The specialist must be Licensed – they must have a credit providers license.  This was brought in on the 1st July 2010 with the new National Consumer Credit Protection Act to protect both Buyers and Sellers.

Buyer Advantages – Owner Financed Home Buying – Austin, TX

Dec 8th, 2010
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Advantages for the buyer in an Owner Financed Home purchase.

Despite the elevated purchase price and higher interest rate, there are many benefits to a buyer who engages in an installment sale transaction.

1. Easy Qualification. The buyer, in many cases, prefers an installment sale to conventional financing because it does not require traditional bank income and credit approval. The buyer may have poor credit because of a divorce or recent bankruptcy. He may be self-employed and cannot prove income. He may be new to his job and cannot meet strict lender guidelines.

Even if he could qualify for a loan, the rate will be astronomical if he has poor credit. Furthermore, few conventional lenders offer fixed interest rate loans to people with a poor credit rating.

As you can see, there are dozens of reasons why a buyer cannot (or will not) qualify for a conventional bank loan. The installment sale becomes the perfect solution for him.

2. Credit Rating. An installment sale may give the buyer a chance to improve his credit rating by owning a home and making payments timely.

3. No Loan Costs. One of the biggest benefits for the buyer is not having to pay the costs associated with conventional loans. Points, origination fees, underwriting charges, appraisal, credit reports, title insurance and the plethora of other “junk” fees charged by conventional lenders can amount to thousands of dollars at closing. The buyer is free from these with an owner-carry installment sale.

4. Fast Closing. A buyer can close and move into a property within days, since there is no third party lender holding up the transaction.

Forté Properties is a full service real estate company that specializes in Owner Financed homes in Austin, TX and surrounding areas. We know how important the decision is when you have to choose professionals for various needs in your life; we take helping people like you who want to purchase a home very seriously.

We have a team of professionals in various facets of the real estate market dedicated to assisting you with whatever your real estate needs may be. Our customers are at the heart of what we do, and we are committed to finding your perfect home, based on your preferences, in a timely manner, for the best price possible.


Article from articlesbase.com

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Even Qualified Buyers Can’t Get a Home Loan – Owner Finance!

Dec 6th, 2010
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You and your spouse hold steady jobs and you have both had those jobs for over two years. You don’t have a house to sell to move into a new house, you have perfect credit and a down payment to boot! So nothing should be holding you back on buying your dream home should it? Real estate broker’s hands are tied in today’s market. They are struggling to get even the “textbook” buyer a home loan.

Today’s unique real estate market situation calls for a unique solution. A solution that protects both the buyer and the seller. The seller gets the full asking price for the property. In exchange, the seller retains the mortgage for a period of time. The buyer assumes the payments (mortgage, taxes and insurance) when moving into the property. Further, the buyer assumes maintenance of the property. Both the buyer and the seller become part of a holding company, called the trust. This becomes a business arrangement, which requires the buyer to perform fully and properly. At the conclusion of a specified time, the buyer then obtains a conventional mortgage on the property they have been living in during the specified time, at the price agreed-upon, when the trust was created.

This provides the buyer a “track record” towards qualifying for a mortgage. The seller knows they are getting their asking price, and is relieved of the burden of the expenses associated with property, now.

There are other advantages to both the buyer and the seller for utilizing this time-limited trust arrangement. The key point for the buyer and seller is they can move NOW, and each party’s interests are protected. While the trust does have finite time duration, it does provide some “breathing room” and certainty to both partners in these difficult times.

To learn more about Owner Financing and the many benefits it has to both buyers and sellers in today’s real estate market, please visit our blog at:

http://www.AustinOwnerFinancedHomes.com

http://www.GreatHomesTexas.com

Forté Properties specializes in Owner Financed homes in Austin, Round Rock, Cedar Park, Kyle, Leander, Pflugerville, Buda, Georgetown, Manor and many more areas around Austin, TX. We offer owner financing on all of our homes. Don’t waste money on rent to own homes or homes for lease. Even with bankruptcy or past foreclosure, you can Owner Finance your next home today!

http://www.GreatHomesTexas.com
http://www.AustinOwnerFinancedHomes.com


Article from articlesbase.com

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Owner Finance Austin – Due on Sale Vs. Sue Happy Renters

Dec 2nd, 2010
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Oh here we go again. I heard from another realtor just this week; oh my seller cant sell a property and let someone take over the payments because the bank may use the Due on Sale Clause to ask for all their money. In the same conversation the realtor outlines the sellers best plan of action is to keep dropping the price (who cares that its the sellers ,000 to ,000 of equity just being thrown out the window) or rent it out.

Many realtors today without hesitation will suggest to their clients, if you cant sell, just lease it out yet the realtors dont sit down and list all of the ridiculous reasons landlords have been sued and LOST millions over. Renting has been around forever and the risks of being a landlord are just an acceptable risk verses the reward of not making vacant house payments or not letting the home go to foreclosure.

Yet at the same time, those same realtors because they are unfamiliar with owner financing as a selling option will say dont do owner financing its too risky. Oh really? Can the buyer living in the owner financed home sue the seller? Nope, not if you construct the transactions the way I do it. If the buyers dog bites the neighbor kid or the UPS guy, can the injured person sue the seller who provided the owner financing? Nope. If the buyer does something stupid, can he sue the seller who owner financed him the home? Nope. Yet if you substitute tenant and landlord instead of buyer and seller in the above questions. The answer becomes yes to everyone. In every one of those scenarios the landlord can be sued, has been sued and has lost.

So I decided I wanted to issue a challenge to all those Due on Sale Clause Nay Sayers out there. Find me lawsuits pertaining to violation of the due on sale clause. Youll find lots of articles from others saying, oh my gosh dont violate the due on sale clause. But find me some that actually have. I cant find any and Im on my third day of searching.

Id bet if youre someone who says to a seller (who cant sell) rent it out, you say that because renting has been around since the dawn of time.  And the risks associated with renting are well known and people take that risk anyway.

I bet no one points out that a 10 year study finalized in 1998 showed that Landlords/Property Managers/Apartment Complexes were the MOST sued business in the United States. Granted only 50% of the landlords lost. But how much did it costs those landlords in time and legally fees to win the battle?

The Due on Sale Clause has been around since 1933. Can you please find me lawsuits where sellers have lost millions due to its enforcement. I cant find them can you???

Forte Properties is a full service real estate company that specializes in Owner Financed homes in Austin, TX and surrounding areas. We know how important the decision is when you have to choose professionals for various needs in your life; we take helping people like you who want to purchase a home very seriously.


Article from articlesbase.com

Owner Financing Wrap Around Mortgages – Austin Owner Finance Experts

Nov 19th, 2010
by admin.
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“A wrap-around mortgage, more-commonly known as a “wrap”, is a form of owner financing for the purchase of real property. The seller extends to the buyer a junior mortgage which wraps around and exists in addition to any superior mortgages already secured by the property. Under a wrap, a seller accepts a secured promissory note from the buyer for the amount due on the underlying mortgage plus an amount up to the remaining purchase money balance.

The new purchaser makes monthly payments to the seller, who is then responsible for making the payments to the underlying mortgagee(s). Should the new purchaser default on those payments, the seller then has the right of foreclosure to recapture the subject property.
Because wraps are a form of owner financing, they have the effect of lowering the barriers to ownership of real property; they also can expedite the process of purchasing a home. An example:

The seller, who has the original mortgage sells his home with the existing first mortgage in place and a second mortgage which he “carries back” from the buyer. The mortgage he takes from the buyer is for the amount of the first mortgage plus a negotiated amount less than or up to the sales price, minus any down payment and closing costs. The monthly payments are made by the buyer to the seller, who then continues to pay the first mortgage with the proceeds. When the buyer either sells or refinances the property, all mortgages are paid off in full, with the seller entitled to the difference in the payoff of the wrap and any underlying loan payoffs.

Typically, the seller also charges a spread. For example, a seller may have a mortgage at 6% and sell the property at a rate of 7% on a wraparound mortgage. He then would be making a 1% spread on the payments each month (roughly, anyway. The difference in principal amounts and amortization schedules will affect the actual spread made).
As title is actually transferred from seller to buyer, wraparound mortgage transactions will violate the due-on-sale clause of the underlying mortgage, if such a clause is present.”

For more great information on Owner Financing… visit Forte Properties in Austin, TX online at http://www.AustinOwnerFinancedHomes.com

Forté Properties is a full service real estate company that specializes in Owner Financed homes in Austin, TX and surrounding areas.

Visit us online at:
http://www.GreatHomesTexas.com or
http://www.AustinOwnerFinancedHomes.com


Article from articlesbase.com

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