A lot of people agree that now might be the best time to buy a home, but this is no use if for some reason you cannot obtain a mortgage. When the Salt Lake Real Estate market collapsed, one of the first things that lenders did was to tighten lending standards making it much more difficult for people to obtain a loan. One solution for this problem is Owner Financing, also called Seller Financing.
Owner financing is where instead of the buyer having to quality for a mortgage, the mortgage is supplied by the home seller and mortgage payments are made to the seller rather than a bank. The first thing to point out is that these types of loan are difficult to obtain because those few sellers who could use this type of financing are often reluctant to do so. After all they are trying to sell a home usually with the intent of buying another home, and carrying two mortgages given the current lending standards is very difficult.
If you are a home seller and are considering owner financing there are a few things to consider. While it does not usually matter if you currently have an outstanding loan on a property, the current lender may be able to call the loan (ask for it to be paid off), due to an alienation clause. Also you will need to check the credit of the buyer and ask for a decent sized deposit in order to protect your equity. Needless to say always consult a professional before committing to anything.