What is owner financing?
This is a method in which a home buyer pays the monthly mortgage payments to a seller, instead of a bank or a lender. This type of agreement is extremely beneficial for both parties since its direct and very straightforward, but requires a higher level of transparency.
In the primary phase of this exchange, the buyer and the seller agree to certain terms and conditions in order to proceed, involving promissory notes or other legal tools. Here’s where everything is laid out, let’s say interest rates, repayment schedules, what to do in case of default, and much more.
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