#seller-financing

#seller-financing

Owner financing, sometimes called seller financing, is when the home seller acts as the lender instead of a bank. Instead of applying for a traditional mortgage , the buyer makes payments directly to the seller based on an agreed loan term and interest rate. Think of it like the seller extending credit to the buyer: the buyer pays in installments over time, and the seller holds the financing note until the property is paid off or refinanced.

This gives sellers a way to finally make a move they've been waiting a long time for, said Dennis Doss, CEO of DossDocs. They can go from a 2.5% to an effective 4% rate instead of jumping straight to 6.5%. It's a win-win for the seller and the buyer, who finally have something easy to work with. Also known as an all-inclusive trust deed (AITD), the wraparound structure is often overlooked because of its complexity, a press release from the California-based company explained.