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A Home Mortgage From The Seller, The Easy Way To Finance

Updated on October 15, 2012

Owner Financing Is The Easy Way

When buying a house in today's market, why not ask the seller to hold the mortgage? If the seller own the house free and clear, what could be easier? What could make more sense for both parties? If the seller owns the house with no existing mortgage, make this your first offer. Ask the seller to accept a small down payment and hold the mortgage.

Instead of going to the bank and begging them to loan you the money, just make payments to the seller. You don't have to pay for an appraisial. You don't have to have any inspections unless you want them. What could be easier? What could make more sense? Why would the buyer want to do that? Why not? It is so easy. The buyer has no forms to fill out. The buyer doesn't need a credit check.

Why would the seller want to do this? A better question would be why would the seller NOT want to do this. If the seller owns he house free and clear, he is probably not living payday to payday. He probably has money in the bank that is not earning very much interest. If you buy his house for a hundred thousand dollars, what is he going to do with that money? He is probably going to put it in the bank and not earn very much interest. Wouldn't it make more sense for Mr. Buyer to give Mr. Seller a down payment and pay him about six per cent interest? Where can Mr. Seller get that kind of return with less risk than a first mortgage? I say the answer to that is nowhere in today's market (2012).

This is a good deal for the seller. This is a good deal for the buyer. If the seller is worried that the buyer won't pay him, a larger down payment will usually make that fear go away. This is a super good deal for the Realtor. You don't have to wait for the infamous loan approval. The loan is appoved as soon as the contract is signed. We can all be sitting at the closing table in five days. This is a good deal for the seller's heirs. When Grandpa is gone, the heirs will inherit this mortgage and receive payments for years to come.

Speaking of the payments, how do we compute the payments? If the seller is holding an eighty thousand dollar mortgage at six per cent, that is $4800 per year in interest. Why don't we just make the payments $500 per month? Is everyone comfortable with that? We could make the monthly payments $476.40. That would pay off in exactly thirty years. We can make the payments whatever the seller and buyer agree to.

If you are buying a house, ask the seller to hold a mortgage. Thirty per cent of the houses in America are owned free and clear. I suppose that is true in your market also. Asking the seller to hold a mortgage is the easiest way to buy and it is the easiest way to sell.

If you are interested in buying a vacation house in the foothills of the Smoky Mountains just south of Asheville North Carolina, I have one for sale. Yes, I will hold a mortgage. Contact my Realtor, Kathy Toomey at 828 817 0942 or contact me at


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