While a majority of Oregon homebuyers work with traditional lenders like banks, mortgage brokers and credit unions, there’s a helpful alternative for purchasing a home without them. Oregon homebuyers avoid traditional lenders for many reasons and one mechanism they frequently turn to is known as seller financing.
What Is Seller Financing?
Also called owner financing or seller terms, seller financing allows a homebuyer to make direct payments to the seller. There are some important considerations in order for a seller to be able to offer seller financing. One helpful factor is if the seller has no remaining loan on the property being purchased. For some more helpful basic information about Oregon seller financing, visit here.
Federal and state mortgage laws often change. The good news is that for many routine transactions, Oregon homebuyers and homesellers can still participate in seller financing.
The latest batch of regulations are largely designed to hold commercial lenders more accountable. If a commercial lender is not involved, the process of buying and selling with seller financing in Oregon can still be relatively simple. The latest rules create a situation where it’s best to be clear if you’ll be dealing with a simple, ‘vanilla’ type seller financing transaction, or a complicated one that requires more time, money and outside assistance.
The following information is not legal advice, but a ‘thumbnail’ overview of some changes in Oregon seller financing. For real estate advice, consult a Realtor. For legal advice, consult an attorney.
The ‘Vanilla’ Scenario
Let’s have dessert first. One of the easier scenarios for seller financing is if you’re buying a home from a seller who has lived in the house as a primary residence. This simple factor is a decent sized ‘green light’ and avoids much additional paperwork, like the need to hire a mortgage loan originator, or MLO, to handle the seller financed transaction. Under the new rules, another ‘vanilla’ scenario that simplifies the process are transactions between family members.
The ‘Small Potatoes’ Scenario
Even if the seller has never lived in the home you’re buying, if the seller is deemed ‘small potatoes’ and not a major creditor, the seller can still provide seller financing. In this case, a ‘green light’ to simplicity is found among sellers who have provided seller financing in a home sale for three or fewer transactions within a 1 year period. This exemption is helpful, since most residential homeowners sell at most one home a year.
The Meat of the Matter
Regardless of the kind of seller financing you consider, consider working with a professional experienced in this unique area of real estate practice. Seller financing offers many potential advantages, but it’s important to understand the process and your limitations.
For More Information
For more information about selling or buying with Oregon seller financing, contact your Oregon seller financing connection, Certified Realty at 503-682-1083 today.
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