THE PROS AND CONS OF OWNER/SELLER FINANCING

THE PROS AND CONS OF OWNER/SELLER FINANCING What's the best way to buy a home in Houston? Depending on your situation, buying with an FHA loan or VA loan can be one of your best options. But another option you should look into is Houston owner financing. However, the decision of whether or not to buy with owner financing isn't simple, especially when you're in the process of buying your dream home and want to get it at the lowest price possible. Here are some of the pros and cons of owner financing to help you make an educated decision as you begin your search for your next home!

PROS OF OWNER/SELLER FINANCING FOR BUYERS

● Owner/seller financing allows a buyer to purchase a business without applying for traditional financing. It can be suitable for buyers who do not have an established credit history or those who are self-employed and don't have a steady income.

● It provides the buyer with 100% equity in the company, which means there is no mortgage. It also opens the possibility of reselling if desired because there is no debt. ● It doesn't require a formal credit check or down payment. For many buyers, this allows them to take their first step into business ownership more quickly than they might otherwise be able to.

CONS OF OWNER/SELLER FINANCING FOR BUYERS ● When a buyer finances a property through an owner, they will be charged a much higher interest rate than if they funded the property through a bank. ● Everything with Houston owner financing simply refers to what the specific seller desires. Even though he may wish for a sale more than anything else, he might refuse to lower his asking price. It is because he has been unwilling or unable to fix anything that needs attention on his property.

PROS OF OWNER/ SELLER FINANCING FOR THE SELLER

● With owner financing, sellers will have more flexibility with terms and rates than in a traditional sale. It means the seller can decide the interest rate and length of the loan, which gives them more control over their bottom line than if they sold it outright on the open market. ● When you sell your house using owner financing, you can maintain property ownership for some time. ● If you are looking for ways to build up your credit score, selling your house with seller financing is an option, as it will lower your debt-to-income ratio. ● If you have equity, owner financing is a great way to sell your home. You can get cash for your home without taking out a loan.

CONS OF OWNER/SELLER FINANCING FOR THE SELLER

● The seller has to take on more risk, as the buyer will have the option to back out of the contract at any time if they can't get a mortgage.

● When an owner finances their property with a buyer and the buyer defaults on their loan obligation, it will cost the owner much more than traditional financing.

TO SUM UP: Consider Houston owner financing if you want to buy a home in Houston but do not have enough cash for the down payment, want to avoid paying mortgage insurance, or need more time to save up for your down payment. However, make sure to spend the time necessary to draft a contract that is advantageous to both sides.