One of the many options out there for no credit financing for a real estate purchase is seller financing. With seller financing, the seller agrees to put up the funds for the buyer, and the buyer agrees to make regular payments until the home that's being purchased is paid off.
The following are five things you need to know if you're looking for no credit financing and you're interested in seller financing:
Seller financing can be advantageous to a seller who is having trouble finding a buyer who qualifies for traditional financing.
Sellers may decide to offer seller financing if a property they're selling has been on the market for a long time without any buyer being found.
Seller financing is more likely to be available at times and in areas where traditional mortgage lenders are reluctant to approve buyers for mortgage loans.
Seller financing doesn't involve taking out a bank mortgage loan and can therefore sometimes be acquired without a credit history.
If you're looking for no credit financing, the most important advantage of this payment option for a large real estate purchase is that sellers may not be interested in your credit history.
While just about any bank loan will require a careful look at your credit history, sellers might focus more on factors like any collateral you have to offer or what your income level is rather than focusing on your credit score.
Seller financing depends on an agreement between the buyer and seller that details factors including the interest rate, repayment schedule, and default consequences.
If you're looking at the possibility of going into a seller finance agreement for no credit financing, your should be aware of the important details of these types of agreements.
The seller is going to charge an interest rate on financing he or she offers to the buyer, so the cost of interest is an important consideration. Otherwise, the buyer and seller need to negotiate a repayment schedule and what will happen if the buyer makes a late payment or defaults.
Typically, the agreement is guaranteed with a promissory note.
Seller financing agreements typically require a promissory note to be signed. This promissory note will hold the buyer responsible for paying back the loan according to the terms of the agreement.
Seller financing tends to offer a shorter term than traditional mortgage financing, so the property must be paid off quickly.
The typical seller financing agreement is often considerably shorter than the term length of a typical mortgage loan. Seller financing is often set up this way so that financing gives the buyer a chance to buy the home and then eventually refinance through a traditional mortgage loan once the buyer's credit becomes more established.
Contact a company like SWE Homes for more information and assistance.
