We are not in a "One sizes fits all" world. Not when it comes to clothes, vehicles, homes ect. and the same goes for financing a home. Not all mortgages are created equal and not every lender has access to the same programs. It is very possible that a buyer can't get financing through through a lender. Sometimes you have to think outside of the box.
This is where owner financing may be a opinion. A seller in need may decide to offer financing to a potential buyer for their home. To make this worth their while, the seller often requires a 10% (at least) down payment, a monthly payment to cover principal, interest, taxes and insurance. This entire payment is calculated and based upon an interest rate that is, of course, agreed upon by both parties. Then there is a call date (typically 3-5 years). This is when the entire loan is "called" and the buyer pays off the loan to the seller in cash or gets another loan to pay of that original loan (did you follow that?).
Now, why would any seller want to offer owner financing or a REC (Real Estate Contract) for Albuquerque Homes for sale? Glad you asked. There could be a number of reasons. Sometimes the buyer doesn't want to sell their current home or can't qualify with a lending institution so they will seek owner financing. The buyer could be self-employed, divorced without credit of their own or haven't been at their job long enough OR buying as an investment. Basically, if they cannot get qualified by a lender and can obviously afford the home, REC's are a great option.
Keep in mind, the seller should definitely do their homework first and have a credit check done and reassure that the buyer has the income to make the monthly payments. If the buyer does not cooperate, cut that one loose ASAP! Realtors can run searches in the Albuquerque MLS to try and find homes that offer seller financing. Also, if there is a home that is not advertising this type of financing, ask your agent to get with the listing agent to see if its an option. A lot of sellers may not even know this is a option until it is presented to them. You just never know. It could be a great opportunity for sellers to make money if they do not need their proceeds from the sale of their home right away. This just might be the perfect fit!
by Tim Fish
by Tim Fish