Owner Financed Homes in Tucson, AZ
It is very interesting to watch the Tucson real estate business and the changes it is continually going through. A few years ago there was lots of money and credit was easy to get. If you could fog a mirror, you could probably get a loan to buy a home. Unfortunately that easy credit is what caused the real estate bubble to burst, after it had caused an astronomical increase in property values.
Today we have very tight credit, and real estate values in most areas have taken a dive. Today it is difficult to qualify for a home mortgage, even though interest rates have dropped below 4%, the lowest rates we have seen in many, many years.
The paradox is that buying a home is harder to do now than it has been for many years. The interesting thing is that the desire for consumers to own their own home is as high or higher than it has ever been.
To solve some of this problem we are seeing alternative ways to buy or finance a home.
One way to do that is to find OWNER FINANCING IN TUCSON.
Owner financing is where an a person owns a home and is willing to fiance or make the loan to the buyer to buy the home.
So how does this work.
Before I get started let me warn you, it is easy to get into trouble without professional support. I would not recommend buying an owner financed home in Tucson with out the help of a REALTOR and an attorney and possible an accountant. It is an area where there are many risks. One of the biggest risks is buying a home where the owner already has a mortgage and having the bank foreclose by calling the loan.
So back to how it works:
- A seller is needed to be found that has a property they own that they are willing to finance.
- For me, I would not buy a property that the owner did not own free and clear of all liens.
- The owner will expect usually a substantial down payment usually 20% of the sales price or more.
- The owner will most likely want an interest rate that is higher than the bank rate, probably currently in the 7%-8% range.
- The length of time the seller is going to be willing to give you to pay the loan off is usually going to be in the 5-10 year range.
- Usually the loan will be amortized over the same term as the bank would give, 30 years.
- The owner may put harsh conditions on the loan and sale that could cause the buyer major difficulty in the future. Examples might be, prepayment penalties, loan fees, late payment penalties, ect.
In conclusion, if you want to buy an owner financed home make sure you have help, a sufficient down payment, and sufficient ability to repay the loan.
Carl F. Pepper, Realtor