Closing on a traditional mortgage loan can be a nerve-wracking experience. The bank or lender institution may not provide sufficient information about the process and you may have many questions left unanswered or unaddressed. However, being informed before making such a major decision is important to ensure you make the best decision for your situation.
On the other hand, if you’re interested in pursuing an owner-financed property, the good folks at Santa Cruz Properties are here to answer some pivotal questions, including, “What should I do before agreeing to an owner-financed loan?”
First Things, First: Seek Legal Protection!
Since owner financing options eliminate the bank or lender institutions from the equation, a very good first step before agreeing to any type of owner financing loan is to hire a property lawyer or licensed real estate specialist to help you better understand the fine print.
This is mainly due to the fact that a promissory note will have to be crafted, which will outline the entire agreement. This promissory note will also have to be approved by the county in which the property is being financed.
Therefore, make sure to seek out the assistance needed to protect yourself legally.
Explore the Different Types of Owner Financing Options
Understanding the different types of owner financing options before signing anything will also help to alleviate some of the confusion surrounding the process.
The following are common types of seller financing agreements:
- Land Contracts: a land contract is an agreement to purchase a piece of real estate.
- Assumable Mortgage: a type of financing in which buyers can purchase a home by assuming responsibility for the seller’s current mortgage.
- Lease Purchases: this is essentially a “rent-to-own” agreement.
- Land Loans: used to facilitate and finance the purchase of a piece of property at a later date.
- Holding Mortgages: a homeowner agrees to serve as a lender for the home buyer, providing the loan for the purchase.
There will be different pros and cons to each of these options, and benefits may also be exclusive to your particular situation, but being aware of them is very important. Having this information available will make it easier to communicate with any support you have hired to streamline the owner-financed loan process.
This will help to reduce the closing time, especially if you’re eager to purchase property for sale in Edinburg.
You’ve Done Research on Owner Financed Properties for Sale in Edinburg, What’s Next?
After establishing knowledge of the different types of owner financing options and hiring support for your particular situation, what comes next?
Having your follow-up questions answered is the best way to ensure you are well informed before making a decision. Thankfully, the staff at Santa Cruz Properties is here for those points of refinement and confirmation. We can help to facilitate the process of purchasing property and finding that perfect owner financing option for you!
Contact Santa Cruz Properties for more help or to learn more about the properties we have available!