Seller financing is especially advantageous to first time home buyers, or to buyers who are having a difficult time getting a conventional loan. It is a good idea for buying Phoenix investment property, as the interest rates are generally lower, and there is no hassling with financial institutions. Sell or refinance anytime without prepayment penalties. We encourage you to build your credit and refinance for an even lower payment. Sellers that do a fair amount of owner financing tend to like to make it more of a standardized process. These sellers of owner financed homes typically will take the current going 30 year fixed rate and put a spread on it.

There are some concerns and objectives that sellers have. For one, sellers want to sell off their property fast and without much trouble. They also want to pay fewer taxes on gains. It is quite possible that in a slow market, Phoenix investment property may remain unsold for years which also prompt sellers to be quite concerned about selling. If the property lingers for too long, owners would have to make mortgage payments on their own or by giving it out on rent. This is where sellers may look at owner financing which is 100% or maybe partner with a buyer for use as investment property.

In the past, some sellers were of the opinion that financing is the buyer’s lookout and not theirs. But the trend and the understanding on the matter is changing as sellers have started to realize that by using seller financing they can get an advantage against competition in terms of overcoming an important hurdle in selling, namely financing for this fairly large buy. First time home owners or even seasoned investors can purchase a home with hardly any down payment and sellers can often contribute as much as 6% of the price towards closing costs.

Seller financing presents very little, if any, problems. The seller doesn’t have to pass the rigors of a lending institution, nor does the buyer. Sellers will typically finance 50 to 60 percent - or more - of the selling price, with an interest rate below current bank rates and with a far longer amortization. The terms will usually have scheduled payments similar to conventional loans. Sellers must know when they list their property for sale that the master association for their property must also qualify in order for a buyer to be able to get a loan. The Rules and Regulations, By-Laws, budgets, insurance policies, everything, are subject to review by lending underwriters, so be aware of conditions while exploring investment property.

Seller financing is a loan in which the buyer assumes the seller’s mortgage while the loan stays in the seller’s name. The buyer becomes the owner of the Phoenix investment property when the seller signs the grant bargain, sale deed, or other specific device to transfer the property. Sellers that have built up equity in their home usually don’t feel like waiting around 30 years to see a return on their money come out of the investment property. For these situations the interest is often set up on a balloon payment. Sellers also want to pay as little taxes as possible on the gains incurred. In numerous cases, the seller can have most of his needs satisfied by an installment sale rather than a conventional cash sale.

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