If you have your home on the market to sell, you have a number of options, which include having the buyer become approved through a qualified lender, or financing the buyer yourself. Sometimes, people want desperately to buy a home but due to poor credit or low down payment, they find it impossible. However, these challenges do not mean the people are bad buyers, just not in a good position.
Although financing buyers is not for everyone, you might find yourself in the position to offer this option to a couple wanting to buy. When you offer financing options, you are giving the buyer the opportunity to work based on their terms. In addition to creating a chance for you to sell your home quickly, it could also be a more profitable solution for you. The types of loan programs available are varied just as with traditional financing.
For instance, if you have a buyer that plans to stay in the home for at least seven years, someone interested in a traditional type of mortgage, then perhaps a 10-/15/20/30 Fixed Rate Mortgage, Adjustable Rate Mortgage, or Jumbo loan would work. Just remember that the difference with buyer finance and lender finance is that you are actually securing the loan for the buyers.
Because you are putting yourself out with some risk, this type of process requires strict contracts with consequences written in stone. Typically, buyers that have the seller finance are grateful for the opportunity to own a home and will do everything possible to do things the right way. Unfortunately, sometimes these arrangements do not work out as anticipated. Therefore, to protect yourself, you and the buyer need to work with an attorney and reputable lender so there are no misunderstandings.
By financing a buyer, you have the chance to add on money, which means you make a little more profit while also providing the buyer a chance of becoming a homeowner. For most, the situation is win-win. Keep in mind that if you are the buyer in this circumstance, you want to make sure you work with an honest person and that you understand all the requirements that would be placed on the contract. The key in most cases is working with a good lender that will provide the seller with a great loan and low interest rate, which ultimately can offer a better savings for the buyer.