When we are talking about investment, investing your money on property is a promising business. As we know, property’s price is always increasing over years. It is why a property is always a good investment for the future. There are so many choices on the types of the property that you can invest such as real estate and land. Whether you want to own or sell it the price will always higher than last year.
Investing in the land can require a huge money at first that is why this might be a tough choice for some people. The most critical thing when you are about to buy a property is the funding. Usually, a bank will provide you a mortgage with interest so that you can buy land or house by installments. Now, there is another option which is owner financing land or real estate for the buyer so that they can purchase a land in an easier way.
More Explanation about Owner Financing Land
The definition of owner financing is exactly as it sounds. It is a solution for the buyers because the owner will fund the purchase instead of by getting a bank mortgage. Do not get confused by seller financing because it has the same meaning with the term owner financing. How does it work? Just like any other loan, there is a contract between buyer and owner on a repayment schedule, interest rate and any consequences that both parties agreed.
Owner financing is usually a short-term contract, five years or less. The owner of the land will take the place of the bank and the buyer will send a monthly payment to the owner. The buyer will also get monthly interest from the loan. In this case, the owner has a right to sell the load to the investor. Then, the buyer will pay to the investor who purchased the loan.
The Advantages of Owner Financing Land
From a buyer’s point of view, there are some advantages of owner financing, which are:
- Lower total cost. You are not dealing with a bank where there are so many administrative requirements. This means it will reduce the total cost which buyer can purchase the land at a lower price.
- Lower down payment. You are dealing directly with the seller. The minimum down payment is agreed by both parties. But, do not expect the seller to negotiate on this.
- The faster process. There is no need to wait for the administration process from the bank, or the legal department underwriter and the loan provider to clear your file. You can directly deal with the owner and purchase process can be done quickly.
Owner financing is uncommon when it has to come with real estate but when it comes to purchasing land, owner financing is commonly acceptable. For example, there is a land in 29 Palms, California which you can purchase only USD 5,995. You can pay 10% down payment and pay USD 149 monthly with easy payment plans by owner financing. Contact us for more information.
Land for Sale in California 