Increase Your Cash Flow, Sales Price, and Real Estate Market.
See how owner financing can significantly improve cash flow and quality of life.
Why Should You Look into Owner Financing as a seller?
Expands Market of Potential Buyers
Fast Closings
No Appraisal Required
No Lender-Required Repairs
Higher Sales Price
Higher Cash Flow
Testimonials
Client Experiences
Abigail Beaver
Real Estate Agent
"As a Real Estate Agent and recent first time homebuyer, I could not recommend Gaby Lockhart enough!! From the start I had no question go unanswered. The consistent and honest communication were very much appreciated. I recommend her to everyone, as I first hand witnessed the lengths she goes for her clients."
Lauren Scheidegger
Home Owner
"Gaby Lockhart with American Mortgage was amazing to work with! She made the mortgage process so easy from recommending other professionals in the process to working on a tight schedule. She is a true professional; fantastic communicator, skillful at crunching the numbers and genuinely cares that her clients close on their perfect home."
Bryce Moore
Home Owner
"Mrs.Gabby was very professional , constantly pushing to get everything finished so we could close in a quick time I really appreciate her help I couldn’t have done it without her!!"
Is Owner Financing Right For You?
Expanded Market of Potential Buyers: Owner financing broadens the pool of potential buyers by offering an alternative to those who may not qualify for traditional mortgages. This inclusivity can result in a faster sale of the property.
Fast Closings: By bypassing the conventional mortgage process, owner financing facilitates swift and efficient closings, providing a streamlined experience for both parties involved.
No Appraisals Required: Eliminating the need for appraisals simplifies the transaction process, allowing for a quicker and less bureaucratic sale.
No Lender-Required Repairs: Sellers can forgo the stress of making repairs demanded by lenders, simplifying the selling process and potentially saving money.
Higher Sales Price: Offering owner financing adds value to the property, potentially justifying a higher sales price and increasing overall profitability for the seller.
Higher Cash Flow: Sellers can achieve higher cash flow by receiving regular mortgage payments from the buyer. This consistent income stream can be a significant financial benefit.
Option to Cash Out: Once the buyer qualifies for traditional bank financing, sellers have the option to cash out, completing the owner financing arrangement.
Complying With The Law.
Use Professionals
REALTOR®
Title Company and/or Attorney
Licensed Residential Mortgage Loan Originator (RMLO)
Loan Servicing Company
Buyer Transfer Fees
Transfer Title (Ownership) - No Contract for Deed
What If a Loan is in Place?
Do you have to own the property free and clear to offer seller financing?
If a Loan is in place, Sell on a WRAP
Wrap Around Mortgage (WRAP)
Underlying Loan stays in Place
Your loan to the buyer literally wraps around the first loan
Cash flow very similar to rental income
Difference is ownership
You can Buy with Sub2 and Sell with a WRAP
With a WRAP – Use Servicing Company
What is a QM Loan and Why Care?
QM = Qualified Mortgage
A QM Loan is a long-term loan for a home that has met all the consumer protection requirements of the Dodd-Frank Act. This type of mortgage is the underwriting standard of the mortgage industry.
Dodd Frank – Ability to Repay from 2015
Under the “Ability-to-Repay” Rule, all new mortgages must comply with basic requirements that protect consumers from taking on loans they don’t have the ability to repay.
Financial information has to be supplied and verified
Lenders must look at buyer’s financial information
Borrowers must have sufficient assets and income to repay the loan
Lenders must evaluate and conclude that the borrower has the ability to repay
No balloons on Owner Occupied Loans – However Interest Rate may adjust after 60 months.
Requirements for Qualified Mortgage
Certain risk Loan Features are not permitted
Terms exceeding 30 years
Interest Only Payments
Negative Amortization where Principal Amount Increases
A limit on how much of your income can go towards your debt
No excess upfront points and fees
Certain legal protections for lenders
Benefits to You of a Qualified Mortgage
A Qualified Mortgage protects you if they buyer defaults
A Qualified Mortgage sells at a higher rate if/when you need to sell your note
An investor/note buyer does not want to inherit your problems
Doing this work up front provides due diligence information for note buyers
Good underwriting is 90% of the work for a Good, Performing Note
Your RMLO is protecting you by providing the borrower’s income, asset and credit information, not simply disclosures.
How an RMLO Protects You
The RMLO’s Job is to:
Prepare disclosures
Ensure the timeframes are met for documents
Correctly categorize the loan as High-Cost or Higher-Cost as this impacts the disclosures and requirements
TILA section 129C(a)(1); 15 U.S.C.
No creditor may make a residential mortgage loan unless the creditor makes a reasonable and good faith determination based on verified and documented information that, at the time the loan is consummated, the consumer has a reasonable ability to repay the loan, according to its terms, and all applicable taxes, insurance (including mortgage guarantee insurance) and assessments.
Ensuring a Good Note
Meet Qualified Mortgage Requirements
Receive a Good Down Payment
Cover Closing Costs + $$ for You
Cover REALTOR® Fees
Loan-to-Value Ratio – Borrower has “Skin in the Game”
Realistic PITI (Principal, Interest, Taxes and Insurance)
Escrow the Taxes and Insurance
Boost Your Retirement Savings.
Owner financing flips the traditional script by allowing the owner of a property to directly provide financing to the buyer, effectively transforming the seller into the bank.
This legally sound arrangement opens up a world of possibilities and serves as an excellent exit strategy, particularly in buyer's markets. Contrary to popular belief, owner financing is not a new concept; instead, it offers a time-tested approach to real estate transactions.
Gaby Lockhart
Mortgage Loan Officer
NMLS: 994468
940-704-7065
Frequently Asked Questions
What is Owner Financing?
Proven, non-qualifying seller financing transactions which have been utilized for more than 100 years as effective sales tools in commercial, raw land and residential real estate transactions. Under owner financing an existing seller’s loan(s) (Prior Note(s)) are not assumed by the buyer, but a seller financed loan is stacked on the Prior Note(s). The Seller remains fully obligated for payments under the Prior Note(s) and no relationship is established between the buyer and seller lenders. The Buyer’s obligations are limited only to the terms of the owner financing, which is payable to the Seller.
Is transfer of ownership in violation of the "Due on Sale Clause" in a residential mortgage illegal?
No. Violation of a public law is illegal, i.e. traffic tickets, punishable by fines, etc. Violation of a “due on sale clause” is not illegal. A real estate mortgage is a lender contract under civil law. Texas civil law provides non-judicial foreclosure as the primary lender remedy for breach of a mortgage contract, in the form of payment default.
