Pros and Cons of Owner Financing


Owner Installment Sales

Owner financing or seller financing is just what it sounds like. Instead of the home owner receiving a major loan from a bank, the individual selling the home lends the buyer funds for the purchase of the property. In this type of transaction, the seller plays the role of the bank and is the financer. If you’re searching owner financing Albuquerque and looking for additional information, contact Sunset Escrow today.

The Pros and Cons for Buyers 
There are some pros and cons when considering owner financing. The potential buyer can reap some advantages to the buyer who engages in an installment sale transaction. The cons that are seen are often the elevated purchase price and higher interest rates. However, new conventional lenders offer fixed interest rate loans today. Advantages of owner financing for the buyer include:

  • Easy Qualification
  • Credit Rating
  • No Loan Costs
  • Fast Closing

Benefits to the Seller

On many occasions, we see sellers that want fast cash and to pay as little taxes possible. Benefits of owner financing for the sale means they can charge a high price, sometimes higher than fair market value. The sale of a property by an owner financing installment will net the seller cash and more capital gain. Some benefits to the seller include:

  • Higher Sale Price
  • More Cash Upfront
  • Fast Closing
  • Tax Savings

Sunwest Trust

As financing experts, Sunwest Trust simplifies non-traditional transactions, which enable both buyers and sellers to reap the most benefits. Since 1987, we’ve become the most trusted escrow company in New Mexico. We believe that helping our clients achieve their goals is extremely important to the success of our business. Transparency is at our core. If you’ve been searching owner financing Albuquerque and want to gain some additional insight to benefits and cons, contact Sunwest Trust today.

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