Should you Consider Seller Financing for Your New Home?

Posted by Kris Lindahl on Friday, April 10th, 2015 at 2:15pm.

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As a buyer, you know when you have found the home for you. You place a bid, and the seller accepts your offer. However, that’s when something takes a turn for the worse. Perhaps, you can not get a loan, you haven’t saved enough money to put down, or the home appraisal is too low.

At this point, the one selling the home could suggest seller financing. This will allow you to still purchase the home, but there are some terms you need to be aware of.

Seller Financing

This is the type of financing where the seller actually finances the home for the buyer. The seller of the home is agreeing to take on the role of a lender. If the seller is able, he can finance the whole loan. If this is not an option, then the seller can finance the portion of the loan that the buyer was not able to be approved for through the mortgage company. The buyer then makes a monthly payment to the seller. This payment will include interest.


This type of financing contains benefits for both the seller and buyer.

The seller benefits include:

  • Sellers use this as an advantage to sell their home quickly. Seller financing attracts a variety of buyers.
  • Sellers can actually make interest off funding the mortgage for the buyer.
  • The seller has the ability to ask more for the home or refuse stipulations such as completing repairs.

The buyer benefits include:

  • Buyers who do not have a pristine credit history will still be able to buy a home.
  • Buyers who cannot obtain a regular mortgage, could benefit from the seller financing the whole mortgage.
  • It is possible that the buyer could receive a cheaper interest rate when dealing with seller financing.

Choosing seller financing isn’t the easiest decision. However, it may be right for some situations.

Kris Lindahl
Kris Lindahl Real Estate

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