mortgage is recorded with the local government. 2. Deed of trust: This is another form of promissory note that is similar to a mortgage deed. With a deed of trust, the title of the home is held by a third-party trustee. When the terms of the loan are satisfied, the title is released to the buyer. 3. Contract for deed: In this agreement, the buyer does not receive the deed and title to the property until the loan amount is paid in full. Until then, the seller retains the property deed and title. 4. Lease-purchase agreement: In a lease-purchase agreement, also called a rent-to-own agreement, the buyer leases the property for a period of time before agreeing to the final terms of buying the home. If the buyer chooses to buy at the end of the lease period, any rent paid during the lease goes toward the sale of the home.
5 ADVANTAGES OF OWNER FINANCING
Owner financing offers several potential advantages over traditional financing models for both sellers and buyers.
1. Fewer hurdles to financing for buyers. For buyers, owner financing may grant you access to financing that you otherwise couldn't obtain. For example, if you have irregular income or a low credit score, you may have more trouble securing a mortgage loan from a traditional lender which makes owner financing a viable option. 2. Shorter due diligence period. In owner financing agreements, the due diligence period when home appraisals and inspections occur can be shortened. For instance, the buyer doesn’t need a home appraisal to
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