Common Questions About Owner Financing in Northwest Arkansas

What is owner financing?

Owner financing (also called seller financing) is when the seller of a home acts as the lender instead of a bank. Rather than getting a mortgage from a bank, you make monthly payments directly to the seller. It’s a legitimate, widely-used method of purchasing a home — especially useful for buyers who don’t qualify for traditional bank financing.

Who is owner financing good for?

Buyers who are self-employed, have recent credit issues, are new to the country, or simply don’t want to deal with the bank lending process. If you have a solid income and can put money down but a bank has said no, owner financing may be your best path to homeownership in NWA.

What kind of down payment do I need?

It varies by property and situation. Generally, we look for buyers who can put 10-20% down. The stronger your down payment, the better the terms we can offer.

What are the interest rates on owner-financed homes?

Rates vary but are typically slightly higher than conventional bank rates to reflect the additional flexibility. We’ll give you the exact terms upfront so you can compare your options.

What happens at the end of the term?

Most owner-financed properties have a balloon payment at the end of a set term (typically 3-5 years). The expectation is that you’ll refinance into a conventional loan once you’ve built up your credit or financial history. We can help you plan for this.

Is owner financing a legal way to buy a home?

Yes. Owner financing is a completely legal, standard real estate transaction. You receive a deed to the property and make payments to the seller rather than a bank. The transaction is documented with a note and deed of trust, just like a conventional mortgage.

What happens if I can’t make a payment?

Contact us immediately. We’d rather work out a solution than go through a difficult process. Communication is everything.