Owner Financing – Is This the Solution For You?

If you wish to buy a home but don’t have the credit and cannot afford the down payment, then owner financing is the solution your looking for. Seller financing (rent to own) is a process by which the seller offers to hold the note for you. No banks or credit are needed for this type of home purchasing. In this article on your options will be explained.

Should you go for owner financing?
How Does Owner Financing work
How to Buy a Home with bad credit

Why use other financing options?

There are various home financing options available in the market but owner financing/rent to own may be your preferable choice if you are in any of the situations given below:

* You do not qualify for traditional loans:

You may have poor credit due to late payments, collections or even a past bankruptcy. And, this may prevent you from qualifying at some of the best rates available. This is when you may opt for seller financing wherein the seller may ask for your credit report although the eligibility criteria are flexible and negotiable.

And if you are self-employed and cannot prove your income or else if you have taken up a new job and do not comply with the strict lending rules, then purchase through installments may be the right option for you.

* You cannot afford to pay closing costs:

You may not have enough funds to pay the closing costs on a mortgage or you may like to avoid paying tons of bank fees. This is where owner finance can save you thousands of dollars in loan costs.

* You need to get into the home fast:

You may wish to avoid the lengthy loan process and close on the home within a few days. This can be done through seller financing. Imagine by this time next week you could own a home!

Top 5 Ways to Kill Your Chances of Getting Business Financing

As I’m working on various financing engagements, I’ve noticed a trend of behaviors and am using this avenue as a therapeutic sounding board.  This article is dual fold.  It’s a chance for me to rant and get some things off my chest while providing constructive feedback to you as to what NOT to do when searching for business financing.

There are ways to present yourself and ways NOT to present yourself.  Today, I’m going to focus on my top 5 ways to kill your financing chances in hopes that you can avoid them.

1) Not Answering Questions Completely or Honestly - Nothing will ruin your credibility faster than being evasive with your answers; or worse, not being truthful.  If you’re hiding information that is later caught, it makes me wonder what else you’re hiding.  Your credibility is shot.  Some people want to put a rosy face on a less than ideal situation…well don’t.  In order to find you the best financing for your business, it’s important to disclose the good, the bad and the ugly.  No business is perfect and these flaws WILL come out in underwriting.  So be upfront…show everything, warts and all.

2) Not Following Through on Your Commitments - If you commit to providing information by a certain date, call back at a specific time, or meet at a certain time, etc. and don’t follow through as promised, you’re viewed as undependable and unprofessional…and nobody wants to deal with that.  Say what you mean and mean what you say.  If you follow through on your commitments, your clout goes up dramatically because of all the mediocrity in the world.

3) Radio Silence - If you think being late with your commitments is bad, going underground and ceasing communications is equivalent to you saying that you don’t want your deal done.  Aside from a family emergency or something life threatening, I can’t think of any other reasons that are acceptable to just stop communicating.  “But I’ve been soooo busy”, you might say.  SO WHAT!  I’m swamped and put in 14-16 hour days and don’t need or want to hear excuses like that.  Please remember to stay in constant contact.

4) Sloppy and Unprofessional - When information presented is sloppy and unprofessional, it shows little care was used when preparing it.  Many conclusions can be drawn, whether true or not.  Maybe they’re not smart; maybe they don’t care; maybe they’re not serious.  Whatever the conclusion, it will not help you get your financing.  Make certain to prepare as if you’re providing the financing and ask yourself what you would want to see.

5) Form Over Substance - If you find that funding sources are cutting meetings short or they don’t want to have them at all, chances are you’re providing form and no substance.  What’s this?  It’s when you talk a good game and it ends there.  You might get lucky and schedule a meeting or two, but when they catch on that the magic ends there, so will your meetings.  Don’t discuss business philosophy or high-level theory.  Have specific, concrete information about your company, why you need financing, how you’ll pay it back, etc.

BONUS:  Here is a sixth way to kill your chances to get business financing…

6) Not Saying “I don’t know” – It seems simple but so many time people will stumble their way through trying to answer a question instead of just saying “I don’t know”.  We’re all human.  It’s OK to say “I don’t know; I’ll have to get back to you with an answer”.  Don’t guess, or worse, make something up.  Trust with others is always easier to build when you’re honest.