Posted by Mike Daly (GA) on April 09, 2002 at 15:50:08:
It’s still quite big. Often people are more willing to buy on L/O or owner financing even though they can probably still qualify for a loan. Either people just think it will be harder for them to get a loan than it really is or they’re just intimidated by the process. Another big reason for buying on L/O is it gives the buyer a chance to “try out” the property.
Owner Financing, Feasible Today?? - Posted by Cire
Posted by Cire on April 09, 2002 at 15:27:22:
Excuse the newbie question as I have never done a deal. I keep hearing about taking home subject to and then reselling the homes to buyers that can not qualify for conventional financing. As I understand it, banks have relaxed their lending requirements significantly in the las few years. It is very easy to get a loan. It may be at a somewhat higher interest rate but is still possible. How big is the market for owner financing? I have thought about running a test ad with a fictional property to see what kind of response I get.
Thanks,
Eric
Re: Owner Financing, Feasible Today?? - Posted by phil fernandez
Posted by phil fernandez on April 09, 2002 at 18:25:24:
Your phone should ring off the hook. Even though in the past few years banks have loosened up their underwriting there are an enormous amount of people who don’t want to mess around with the banks long, tedious and intrusive loan approval process. And some of these folks have excellent credit and could qualify for bank financing.
There are also people out there that presently do not qualify due to not being on their job long enough, not having a low enough debt to income ratio, not being able to sell their current home. Often banks won’t finance someone because they are in the process of getting a divorce, even though they have the income to qualify. And on and on.
All of the above reasons are why people prefer owner financing. They can be in their home in two weeks instead of eight weeks and with less stress and pay less in closing costs.
As the foreclosure rates climb, you will see banks tighten up on their qualifying criteria. When that happens, we as investors offering owner financing will be embraced by hungry buyers.