rent versus buying a home

Owner Financing Advantages and Disadvantages (Infographic)

Getting approved for a home mortgage is tough in today’s economy.

In order to buy or sell a house, both parties must become more creative.

Perhaps the most creative way to buy and sell a house in today’s housing marketing is by using owner financing.

What is Owner Financing?

Owner financing is when the seller agrees to sell the property in exchange for a note where the buyer promises to pay back according to the agreed upon terms and pledges the property as collateral for the loan.   Since only two parties are involved, the terms are generally more flexible and the closings much quicker than with a conventional loan.

Owner Financing | Example

  • Property Value: $175,000
  • Sales Price:  $175,000
  • Down Payment:  $15,000 (includes $5,000 for closing costs)
  • Note Value: $160,000
  • Interest Rate: 9%
  • Balloon: 4 year

Once the terms are agreed upon, the signing of the documents will take place in front of a notary and the paperwork will then be filed at the courthouse.  In many instances (though not required), owner financing deals will be closed at a Title Company.

The infographic below will detail the advantages and disadvantages of owner financing:

Owner Financing Advantages and Disadvantages


One thought on “Owner Financing Advantages and Disadvantages (Infographic)”

  1. I love it whenever people come together and share ideas. Great website,
    keep it up!

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