When banks turn down your home loan application, you may want to look for some other source for funds to buy the house. On such occasions, you can also request your seller for the financing. Real estate owners who are unable to sell a property also provide such options to home buyers who will return the money as per the agreement.
In certain cases, the buyer can get half of the money sanctioned from commercial banks and the rest from the sellers. Owner financing provides easier qualification for the buyers with flexible payment terms. The buyer and seller enter an agreement with a fixed interest rate and tenure.
Owner financing is also known as seller financing. To carry out the process, it requires a certain level of legal paperwork, including promissory notes, mortgages and trust deeds. The paperwork is standards and it protects everyone involved.