The Definition of Owner Financing: 

Owner Financing, also called Seller Financing, is where the Seller agrees to finance part or all of the purchase price of a home to help the Buyer purchase the home and complete the sale.

So that the Seller can sell and assist the Buyer who is unable to obtain a conventional loan through a bank or mortgage company the Seller will use Owner Financing to help the Buyer purchase home. 

Is Owner Financing For Me?
Bank and mortgage companies basically just run the numbers and stick to their guidelines. For many people, these numbers and guidelines are too restricting for them to get financing for a home today. If this is your situation then Owner Financing is probably for you.

Why don't I meet the bank or mortgage company guidelines to get a loan?
They have very restricting guidelines and there can be any number of reasons a person might not qualify. It could be anything from lack of time on a job to unsatisfactory items on your credit report and so on. Basically, any reason that makes them uncomfortable lending the money.

How much Time will Take To be Approved and then start to Move In?
Usually 1-2 business days after you have submitted a completed application we can let you know if you are approved. Once approved we can go to closing and you can move into the house right after closing.

How Does Owner Financing Work?
Our Owner Financing program is an easy qualifying program with significantly less paperwork than a traditional bank. We step in and act as the bank to provide financing for our Buyers. Our Owner Financing is basically a Balloon Mortgage.

A Balloon Mortgage is a loan which is amortized for a longer period than the term of the loan. Usually this refers to a thirty year amortization and a five or seven year term. At the end of the term of the loan, the remaining outstanding principal on the loan is due in lump sum. The final lump sum paid at the maturity date of a balloon mortgage is known as a balloon payment.

We do this using a Contract for Deed, which gives all the terms of our agreement for financing, such as interest rate, balloon date, term of the loan, amortization of the loan, balloon payment amount, and other details. We will setup an escrow account for your payments to be made directly to us instead of a bank.

Do I have to wait until the end of the loan term or balloon date to refinance the home?
No, if you have obtained a loan before the end of the term you may refinance at anytime. Most important, there is no penalty for doing so.

With our Owner Financing program if your are ready refinance to permanent financing you have obtained then feel free to do so at anytime. You don't have to wait until the balloon date.

OK, I want to Buy but still can't obtain financing yet, what now?
We handle this on a case by case basis and usually we will have to change terms and price. We may offer to extend the loan term for an additional fee or change the purchase price and terms. If you have established enough equity or saved enough for your down payment we may offer rewrite the contract so you can continue with our Owner Financing program. This way you don't have to move and get more time to obtain permanent financing.

We will try to help if we can however you have to show us that you tried and made an effort to help yourself first. That means making payments on-time with us and other creditors, maintaining stable employment, etc. Otherwise, we will not be able to offer any other options as you really didn't make a true effort to purchase the home at the end of the loan term or balloon date.

What is the difference between Owner Financing and Rent To Own/Lease Purchase programs?
A Lease option gives you the Option to Buy the house at a locked-in price for a certain period of time, the Lease option period. The option gives you control over the property and locks in your the purchase price of the home. However, you will still have to obtain a loan by the end of the Lease Option period or convert to our Owner Financing program so you may own the home and receive additional financial benefits.

Until you obtain a loan or convert to Owner Financing program you will not be able to receive tax breaks and write-offs, pay down your mortgage to build more equity, and other various financial benefits enjoyed by homeowners. 

What type of terms are available with Owner Financing?
We are not a bank so we are not able to offer terms like the banks offer. However, we are very flexible and make an effort to accommodate the Buyer with terms they can handle. Usually we like to set up what is called a "Balloon Date" which is the date by which you will need to secure permanent financing or refinance your Owner Financing loan. The loan you obtain will be a Balloon payment of whatever amount we financed for you and will take the place of our Owner Financing loan.

So where as a bank or mortgage company can provide long term financing from 15 to 30 years long we offer financing with Balloon dates of between 1-10 years. Again, we try to be flexible so we can accommodate your situation while still giving you time to obtain permanent long term financing. We are investors and buy homes so that we may later resell them not lenders who loan money. We simply do this to help buyers into our homes.

How are Taxes & Insurance handled?
With Owner Financing we will setup up an escrow account to maintain taxes & insurance and then this will transfer to you once you refinance.

How much of the Down Payment goes towards Fees & Closing Costs of the loan and What are they?
We include the cost of the legal fees, setting up the escrow account, 6 months of Tax & Insurance payments, and any financing fees (points) associated with the loan. Often we can roll some or all of these into the loan for you.

Again, these are outlined in our agreement so you know exactly what to expect before you buy the home.

How do I get Approved?
We are looking for a 5% down payment for our Owner Financing program. This will be credited to the purchase price of your home and any other closing costs associated with your home purchase. Also, you must have sufficient income to support the new home payment as well as your other monthly debts. Do you have less than 5%, you might still qualify for the Lease to Purchase program through Travis County.

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