(1) Owner financing (also known as seller financing) takes place when a borrower finances the purchase of a home through the seller, bypassing conventional mortgage lenders and financial institutions.
(2) It may sound strange — even a bit backward — for a home seller to offer to finance a buyer’s purchase of their property, but this type of owner financing is actually not as rare as you may believe it to be. This typically only occurs when a seller is fiscally well-off enough to provide a loan to a buyer. Why would a buyer rather get a loan from a seller than a bank, you ask? Well, not every buyer has the financial standing to get mortgages from proper lenders. So, in these situations, they can try to find listings on the market for which the owner is willing to offer assistance — with interest attached, of course.