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Owner Financing Maine Land

Buying Maine Land with Owner Financing

As a buyer of Maine land, you might want to consider owner (seller) financing your purchase. With owner financing, a bank isn’t involved in the sale. Instead, the buyer and seller make the arrangements themselves by drawing up a mortgage and promissory note setting out the interest rate, schedule of payments, and the consequences should the buyer default their obligations. With only two players involved, the advantages of owner financing can be a quicker and less expensive transaction. When the seller finances the sale the deal closes faster, as there is no waiting for the bank loan officer, underwriter and legal department to approve the sale.

Closing costs are typically much lower for a seller-financed sale. Without a bank participating, the buyer can avoid the cost of application fees, points, appraisals and a host of other charges that lenders routinely charge during the financing process. You can literally save thousands.

Owner financing usually runs for a fairly short term with a balloon payment coming due at the end of the period. Monthly payments can be tailored to fit the needs of both buyer and seller. The theory­­­­ is that the buyer will eventually refinance that payment or have the cash at a future date to pay off the loan. One to seven years is a typical range that a seller may be willing to owner finance your property. 

Many banks offer great financing on homes but are not comfortable financing land. Thus, they frequently demand large down payments and high-interest rates. Some banks do not even offer land loans. Many buyers may have the down payment required but lack the ability to obtain bank financing for other reasons. Employment history, recent job changes, etc… can influence a banks willingness to work with a buyer. In a sale involving owner financing, the seller may be willing to take on risks that a bank would not consider. This doesn’t mean that people with poor credit can jump right into an owner financed transaction. The seller will most likely want to review your credit as well and will want to feel assured that you will repay the loan as promised.

In summary, the benefits and rewards of an owner financed transaction are worthy of your consideration. For some, owner financing is the only way they can start to realize their dream of land ownership. For others, it is a great way to transition into a purchase with ease and low up-front costs. As with all real estate transactions, we encourage you to seek professional advice from a real estate attorney and/or an accountant to help you evaluate your options and execute the transaction properly.

Click to view Maine properties for sale with owner financing!