Avenue Mortgage, LLC

NMLS #1115220

Should You Finance The Sale Of Your Home By Yourself?

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Should You Owner Finance Your Home For Sale?You’ve decided to put your home up for sale. Now, how are you going to make the most money selling it and get it sold the fastest? Perhaps you should consider providing owner financing, also known as seller financing. 

Why Isn’t The Buyer Getting Bank Financing?

Usually a buyer gets bank financing when buying a home. If the buyer approaches you with a deal that involves you doing the financing, you’ll want to ask why. 

It could be that they can’t afford a big down payment, and can’t be approved for a loan without it. Or, they may not be able to get financing at all, due to no credit or bad credit.

In that case, you’ll want to evaluate if you can afford the risk. Can you make the monthly mortgage payment in the event they default?

If you determine that the deal isn’t too risky, you can finance the home yourself for a greater profit. But, there are some instances when you won’t be able to owner finance your home for sale.

When Can’t I Owner Finance My Home?

You may not know that in order to finance your home yourself, you have to be able to pay off your current mortgage in full prior to making the sale. If you can’t afford to make the full payment, you won’t be able to owner finance the property.

If you already own the house outright, you’ll be able to finance the property. You may decide to owner finance part of the sale price for a higher interest rate. 

This would be an ideal situation for a buyer who can qualify for a bank loan for most of the sale price, but is unable to be approved for a higher loan amount to get the rest.

After a year of making payments to the bank, the buyer may be able to finance the remaining amount, and then you’ll receive a lump sum for that amount. 

What Else Do I Need to Know?

There are a lot of things to take into consideration before deciding if owner financing is right for you. Be sure to do your homework and understand the benefits and risks of owner financing. It is also wise to consult with a real estate lawyer and a professional real estate agent.

Thinking of listing your home for sale and offering owner financing? Let me help you determine if owner financing will benefit you. Call your trusted mortgage professional today.

What Are The Closing Costs Of Real Estate?

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What Are The Closing Costs Of Real EstateYou’ve found the perfect property and a great mortgage loan with the best interest rate you can find. What’s next in the home buying experience? Signing the contracts and paying the closing costs. But what exactly are closing costs?

Here Is A List Of The Most Common Closing Costs:

  • Titling Fees – These include the title search and title insurance, and the associated attorney fees. These costs are usually paid by the seller but can be assigned to the buyer.

  • Recording Fees – The government charges a fee to record the change in ownership of the [city] real estate. This can be paid by either the seller or the buyer.

  • Survey Fee – A survey fee can be required by the lender. It is a fee for the survey of the land or lot, and its structures, to determine that it matches the property description.

  • Mortgage Application Fees – Occasionally mortgage application fees are included in the closing costs, but usually are paid prior to closing by the buyer.

  • Appraisal And Inspection Fees – An apriaisal and inspection are required by the lender to ensure that the value of the property is equal to that of the loan, and to make sure there aren’t any underlying problems that detract from the property value. These fees are usually paid by the buyer.

  • Points – Points are equal to one percent of the principal of the loan. These discount points are paid by the buyer to the lender to reduce the final interest rate of the loan.

  • Brokerage Commission – The seller pays the real estate agent the brokerage commision fee for listing, showing the property, and handling the contract negotiations. The commission is usually a percentage of the sale price of the property, and determined in advance by the seller and the real estate agent.

  • Underwriting Fees – The buyer pays underwriting fees to the lender to pay for the costs of determining if the buyer qualifies for the mortgage loan.

  • Property Tax – County property taxes are usually required to be paid for six months in advance at the time of closing. The buyer is responsible for these fees.

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100 Independence Place, Ste. 308
Tyler, TX 75703