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If you have a home that’s paid for and you want to sell it, you may want to consider owner financing. That’s where you agree to take payments from the buyer, and it’s often done with buyers who don’t have a lot of money and who don’t have the best credit. They usually have a reasonable down payment, but they won’t be able to get financing through traditional means. Some sellers are too nervous to use this option, because they’re afraid that they wouldn’t get paid or the buyers would start being late with payments. Most of the time, that’s not the case. Many buyers are struggling right now because they damaged their credit when the housing market imploded. They need some time to get back on their feet, but they’re also tired of renting.
For buyers like that, owner financing, or owner carry (meaning that the owner is carrying the note or mortgage, instead of the bank carrying it), can be a real lifesaver. For sellers, it’s also a good way to sell their home quickly and close faster. That way he or she won’t have an empty home sitting on the market after he or she has moved on, or the owner won’t have to stay living in his or her home for a long time, just waiting for it to sell. It is possible to move a home quickly in this market, and owner financing is one of the best ways to be sure that happens.
Of course, it’s not for everyone. If you have a house and you owe money on it, the bank won’t let you sell it to someone else without paying off the mortgage. At that point, owner financing isn’t an option – but you can rent your home out to pay the mortgage note, or you could lease it to someone with the option to buy it when his or her credit gets better.