It is important to have choices in life, which why alternative financing, seller-financed loans on houses matter. This is related to having options or alternatives. It is said that variety is the spice of life and when it comes to finance and loans on houses, you will be glad to have variety. When you are considering buying a house, you have a lot of places to go to. There are government loans, bank loans, financial institution offering mortgages and seller financed loans for homes.
One of the major reasons why people can’t get loans for buying a house is because they have bad credits. That is to say they took out a loan in the past and didn’t pay it back. There is also the case where the buyer of a house wants an expensive house but doesn’t earn enough to finance it. These reasons can put off banks or other lending organizations from giving you a mortgage. That is where alternative financing seller financed loans on houses can help. That said, the most difficult thing about this is finding a seller willing to be your banker.
Why will a seller finance a house he is trying to sell? Some people have the needed financial backbone and they are also willing to take the risk. It can be fun to act like a bank for a while and get your interest paid to you in form of rent on a monthly basis. Alternative financing or seller financed loans on houses can be seen when people sell to family members or when they have a second home they want to get rid of. Some parents can help their children become homeowners through this scheme. This can work well to the advantage of both parties because any financial difficulties can be worked out in the family.
What happens if you offer alternative financing to someone and he defaults on the loan? This is a little annoying but it is not a deal breaker. You just act like most banks do. You put a foreclosure on the house and it becomes yours. If you can put the house for rent in the meantime, you will still be getting some form of income until you are able to sell it.
Where can you find seller financed loans? This is very hard to find because most home sellers want to get their hands on their money immediately. They don’t want to wait for another 30 years for you to finish paying them their cash. What if you were to die before receiving all you cash? That is why only banks and major financial institution offer mortgages to finance a house.