Owner Financing

What is Owner Financing?

Owner financing means the seller took back a mortgage when the seller sold real estate they owned.

What does "taken back" mean? Very simply, when most homes or other real estate is sold, the buyer goes to a bank or other lender and borrows the money to buy the real estate. The real estate seller gets cash for their real estate at closing.

However it is possible for the seller to finance all or part of the purchase price instead. Instead of getting all cash the seller receives a mortgage and note, a promise to pay, from the buyer. This is called "owner financing".

This could be a first or a second mortgage and we'll explain what that means a little later.

The important concept to understand now is that the owner gave owner financing when they sold their real estate and are now receiving mortgage payments from the buyer.

Advantages of investing in owner financed mortgages
Three advantages of investing in owner financed mortgages

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