Question about owner financing?

Question

I have been renting a condo for the past year and just recently the owner of the condo contacted me and told me that he plans to sell the condo when my lease is up. He also asked me if I would be interested in buying the condo. I told him I would be but that I wouldn't qualify for a loan because a past divorce REALLY screwed up my credit (we are talking 400's here). He then told me that we might be able to work something out with owner financing. What exactly does this mean? Since my child support ended I am making much more now than I did and in fact just bought a new vehicle (but even with that I needed my fathers' co-sign to get). I have been making strides in paying off some of the credit cards that went dormant for so long but still the history is there. What would my chances be of being able to buy the condo this way?

Answer 1

Owner financing means your landlord would hold your mortgage.  You'd be making the payments to him instead of a bank.  This would be a good deal for you as you don't have to worry about your credit holding you back but just do your research to determine what a fair interest rate would be and pay a lawyer to do all the paperwork so everything is legit.

Good luck to you.

Answer 2

what ever you do don't make any verbal agreements.  Have a lawyer handle all the paper work.  I don' t know much about owner financing, from the little I know, the owner have to own the property out right, that's the only way he can finance the mortgage.

Answer 3

Add'l comment to Andrea.

Just make sure the seller signs a grant deed/quit claim.  You don't want to be making payments to him/her, and have him/her still making payments to his/her bank (AITD).  The issues is when the seller stops making payments to his/her bank.