Back to Glossary
Owner Financing
January 19, 2023
Owner financing is a transaction in which the property seller funds the purchase directly with the person or entity purchasing it, either entirely or partially. Because it avoids the overhead of a bank middleman, this sort of agreement can benefit both sellers and purchasers. On the other hand, owner financing might expose the owner to far more risk and responsibility. - Owner finance is sometimes known as "creative financing" or "seller financing." - When owner financing is a possibility, this sort of financing is often indicated in a property advertisement. - Owner financing requires the seller to assume the buyer's default risk, although owners are generally more ready to bargain than traditional lenders.
Related Topics
When Is the First Mortgage Payment Due?
What Does Foreclosure Mean?
What Is a HELOC Loan?
Loan Default
Financial Considerations (For First-Time Home Buyers)
Mortgage Loan Types
Payment and Debt Ratios
Home Value: Appraised, Estimated, Actual