by Jeff
3. November 2011
There are instances when a property owner just can't go by selling his/her property at the price they intend because of a multitude of reasons. One being the current housing crisis in the coast that hits buyers hard combined with the global downturn hitting everyone making getting a mortgage difficult in part of the buyers. Getting a mortgage is key to getting a new home or house and without it, people just don't have that much cash to go by with buying their own dwelling. This is precisely why more sellers are discovering the advantage of owner finance in effectively marketing their properties and houses especially in a tough market. With owner finance, no longer would buyers have to worry about getting a big mortgage loan from the bank, instead it can wait and buyers can focus on moving in earlier into the property through renting with the seller.
Vendor finance is when a seller decides to shoulder or finance either a part or the whole amount required for selling the property this includes any council fees, mortgage etc. and offers the property as rental to the prospect buyer or much like rent to own. With vendor financing, a buyer may opt to rent now and buy later once they are able to procure a mortgage from the bank or once they have a better credit history. Through this program, you can be certain that your money works for you because a certain percentage of every repayment you make is applied as credit to the principal price of the property making for a substantial discount to the price once you are ready to purchase it.
Through this program, a wide variety of properties are made available as rent to own because of a wide breadth of potential vendor finance sellers. Now shedding some light on the side of the vendor, for those who are probably asking what do sellers get out of it. Actually sellers have a pretty good share of pros when they turn to owner financing. First off is a steady flow on income, rather than get a bulk amount wherein not everything goes to you because of mortgage, with vendor financing, you get a weekly income out of the repayments the buyer makes. Secondly the seller keeps the title and legal rights to the property until such time that the buyer purchases the property outright meaning decisions regarding the property remain with the seller until such time that the buyer gets to buy the house and close the contract.
All in all owner finance has its advantages for both the buyer and the seller and simply gives more options to potential home buyers and future home owners. If you think you’re in the market for buying a house but don’t quite have the funds for now, then check on the availability of owner financed homes and discover how easy it is to rent to own your place today.