This page discusses whether or not an Owner Will Carry / Seller Finance property is for you.
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- What does the process for purchasing an owner carry house look like?
Most properties you see on the market that are available for “owner carry” do not have have a mortgage on them. Although NO CREDIT is required, many were purchased by investors for cash and fixed up to make a profit. This means there is a high probability that you will be paying over market price to get one. If you have a significant other participating in this decision, now would be the time to have this discussion as we charge a non-refundable $1000 fee to handle your escrow once all parties have accepted the terms.
How They Work
- What are typical financial terms?
|These describe the most common but there are a zillion variations.|
5 Year Balloon
During the 5 years, you will be making some type of payment that is principle and interest OR interest only. At the end of the five years, you will have a balance due. This balance due is referred to as a balloon. It will be your responsibility to find a mortgage at the end of the 5 years to pay this balloon off.
5 Year Principle & Interest
The wisest financial path to take is to just pay the whole loan off in 5 years. At the end of the 5 years, you own the property free and clear.
10 Year Principle Interest
If you can find an owner willing to carry a note for 10 years, this is the sweetest thing you can find! At the end of the 10 years, you own the property free and clear.
- What happens if I fail to pay on time?
There will be conditions of your note to the owner that spell out the consequences of not paying on time. Typical consequences are late penalties. However, if you go beyond the boundaries of the agreement, the owner can foreclose on you and take repossession of the property.
- Will I be on title and get the tax benefits associated?
Yes. This is the largest benefit of an “owner carry” deal.
- Can I choose who services the note or handles title?
Yes. We don’t care who you use. We will provide you a list of who we like but ultimately both parties have to agree.
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