Owner Financing need advise

6 Replies

My husband and I are purchasing a new home and the owners are offering to owner finance it for 6 months if we refinance it in 6 months and pay them the balance. How do we go about doing this and what should we do to get started?

Are there any specific reasons why you need to owner finance?  I seems to me that if you "need" i.e. a bank won't give you the money, that 6 months isn't going to make a difference, and you would likely not be able to get bank financing then either.

I kinda sounds like the owner just wants to make a little bit of extra money.  Typically an owner financed deal will be at a higher % than a bank.

it's a kinda complicated deal. My husband and I went I to contract with this couple in January 2015 with a close date of June 2016 to lock the sales price in. We can't close on the house with a traditional bank without selling our current residence and the sellers can't move out of their house until June when they are moving out of state. However with rates going up and us now a year into the contract they are concerned about the rates going up and us not being able to pay a mortgage on the mortgage in 6 months. They are trying to help us out by doing seller financing now so we don't need as much of a down payment and can just refi in 6 months and pay them out. 

What is the concern? The interest rates that may or may not go up in 6 months? The rate increase that just happened is tied to the overnight rate banks use to lend money to each other. This directly affects the prime rate, not the 10-year treasury bond that drives fixed mortgage rates. Who is initiating the owner financing discussion, them or you? Are you working with a lender to make sure you're approved when the time comes to close escrow? Are you actively selling your current place? Have you considered renting your current home instead of selling (or if you can't sell)? 

I feel like we need more info to be of any help 

we will be able to be approved for the loan on the new house once we sell our current home. We are working with a lender and they said we are pre-approved with a 10% down which we would get once we sell our current home. If we refinance we wouldn't need to put any additional funds down and would be able to keep our current home and rent it out. 

If we do seller financing we would be able to do a smaller down payment and keep our current home.