What It Means To Buy Owner Financing Homes

These days, with the overabundance of existing homes already on the market for more than 90 days, conventional methods are simply not working like they used to. Add into the mix the ridiculous numbers of foreclosed homes and you wind up with a stagnant housing market. Even with sterling credit, you will jump through hoops trying to get financing to purchase a home and still wind up unapproved. The solution many are turning to is purchasing owner financing homes. This is one area that could use a change, as the average fair market value for a home today is over one million, but even with being listed at half that value, are still not selling.

You have to look for those that are listed as home for sale owner financing, or for sale by owner, in the local newspapers and websites. This is the best way to find owner financing homes. If you talk to a real estate agent, they may not know of any, and just approaching a seller to ask if they can finance the sale for you will probably not work out. That said, before you start your search, it may be a good idea to learn how it works, and the benefits that comes with owner financing.

What is Owner Financing?

Whenever a home for sale carries that added term “owner financing”, it means that the purchase price, minus the down payment, will be part of a financial contract that exists solely between the seller and the buyer. The buyer negotiates with the seller a purchase contract that is binding, and allows for a payment plan over time that is put towards the final purchase of the home.

Just like bank loans, the seller and buyer agree to an acceptable interest rate, monthly payment amount, and term of loan. In most cases, these are also called rent to own, with option to buy deals, where a portion of the monthly rent is put towards either the purchase price or the down payment, depending upon the buyer and seller’s financial position. A security instrument will be created, listing all details of the sale agreement, and will be filed with the court as would any other real estate transaction, for the protection of both parties.

Types of Owner Financing

In the case of owner financing homes, the seller will often carry the mortgage for the entire purchase price, less the down payment. This is known as an all-inclusive mortgage. When a buyer cannot get a mortgage loan on their own, this is often the best way for them to purchase a home, and the resulting loan is often in the seller’s name, rather than the buyer’s. All payments are made to the seller, who then uses them to repay the loan.

Lease purchase agreements are another way to handle this kind of real estate sale. This means that the seller is giving the buyer an equitable title, and is leasing the property to the buyer. The negotiated lease payments or a portion of each payment is put towards the purchase price, less interest, until the balance is paid, and the buyer receives full and clear title to the property.

Benefits of Owner Financing

For the buyer, there are obvious benefits to this kind of purchase agreement, especially if their credit rating is not the best. The loan can also be tailored through negotiating with the seller to an affordable and reasonable monthly payment, down payment and interest rate that you know you can afford. You also get possession of the property faster, and you probably will not have to pay any extra fees or closing costs.

For the seller, the owner financing homes program means that you will be able to command the full market price for your home, and you will not have to pay the full taxes on the sale that year. With an installment plan in place, you only have to pay taxes on the income from that sale collected that year, not the full amount all at once. You can offer the buyer a lower interest rate than any lender, making the sale even more attractive and it will most likely spend less time on the market than it would through an agency.

Franchise Finance Lenders – Things to Consider When You Buy a Franchise

Business folks often refer to the term ‘key to success’ as part of their business plans. Certainly the key to success when you buy a franchise is to finance it on time, and properly; we tell clients you don’t get a lot of chances to make mistakes when you are working with franchise finance lenders!

The concept of financing your franchise is a broad one… it might be one single loan or a couple different finance strategies to get you to the goal line, which is of course acquiring and owning your own business under a franchise umbrella… in effect the Canadian dream.

Try and try again generally doesn’t work in franchise finance – you more or less, in our opinion, get one chance to do it right. That therefore involves getting all your ‘ ducks’ lined up properly and working with an experienced Canadian business financing franchise advisor, or if you prefer, yourself and the lender directly.

As we said, making mistakes in business finance is not where you want to be – so plan, do it right, and do it once. Let’s examine some of those underpinning you need to be successful and avoid those errors.

In general some of those cornerstones are decent personal credit history (more about that in a minute – as we can hear our clients already ” what’s decent?!), a down payment that makes sense. and a financial plan that demonstrates your ambition to be successful.

This latter point is usually covered off in a business plan. We can’t ever imagine buying a business without a plan, and humbly submit that if you don’t have a plan you are primed to fail – and that’s not a good thing when you have your own funds at stake.

Can you buy a franchise in Canada, and finance it without a good personal credit history. We tell clients the sad truth is that it is difficult, if not impossible, to do that successfully. That’s because franchise finance lenders view your business as both a start up and a small business, and they relate those two terms directly to how you manage your own personal finances as the owner. To put is very simply, the lender is saying ‘ if this man or woman isn’t paying Visa then why should I think they are going to pay us….’ In Canada the credit bureau system is based on a score to 800 and you need a certain specific number to qualify for franchise financing. Speak to a trusted, credible and experienced business financing advisor as to how you can manage and work through that process.

You probably have spent a large part of your life dreaming about crafting a great business plan, opening balance sheets, 3 years of projected cash flows… loan amortizations, etc. Uh… we’re being a bit sarcastic of course!! But the reality is you need a solid business plan to demonstrate how you will be successful. It’s a great document for benchmarking down the road even how you are doing against your plan.

In Canada the majority of franchises are financed and subsidized so to speak by a special federal program called the BIL program. Don’t make a mistake in not understanding what the qualifications are, and work with an expert if you don’t feel you are comfortable in navigating the finance maze.

So, is financing the key to Success when you buy a franchise in Canada. We’ll let you be the judge… but if you are on the side of our opinions plan, and work with an expert, do it right, and avoid mistakes that will jeopardize closing the transaction,.

Do Car Finance Companies Know That Buyers Want a Reliable Car?

Are you planning to buy a decent and a reliable car? Many of US are searching to buy a new or used car but need car credit loan, most of them would find two different options, 1. Nationalize Bank and 2. Car Finance Company. Before you begin, you need to make sure that auto loan lender or a finance company that you choose is professional and experienced; and understands your car requirements. In the present economic scenario, owning a car loan isn’t a difficult task, and moreover with lots of auto loan providers and multiplicity of options, low interest auto loan rates aren’t something which seems far from reality. Further, there’s intense competition among the auto loan providers, and this automatically adds to the advantage of borrower. But amidst all the positive environment that is available to auto loan borrower, it becomes quite necessary to mention here that auto loan lenders will not provide low interest auto or car loans, until they are not satisfied with your credit score.

If you have a credit score of less than 640, then the conditions becomes sensitive for you, and in such a situation and lenders will think twice before passing your auto loan application for further processing. The most significant fact to know out here before the lender offers an auto loan is to check for credit score and also the past credit score rating. If you have impressive credit score, there’s nothing that needs to be done from your side, except filling the application and providing the proof of your credit report that will be attached with the loan application.

Car finance rates are variable, and this variability depends upon the kind of auto loan that you are going to apply. Again the question of low interest rates comes into the picture if you are searching for the lenders who can offer you the desired interest rates. This will help you to make a choice from the line of luxury cars rather than unwillingly settle for the basic car models. In general, the loan term for the auto loan can be settled between 6-months to 5-years. If you are going for used car loan, the loan term will be automatically reduced. Last, make sure that the new car loan that you hire is easy to repay.

Today due to many lenders in finance business the market of online car financing is highly viable. Individual will find wide range of financing options, but before you begin, consider all the auto financing options available to you. The most efficient way to avail the best auto financing options is to match the loan quote from multiple lenders. While comparing car loan quote be sure to look at the annual percentage rate (APR) and over-all cost of the entire loan. The whole cost includes amount borrowed, added to the deposit, interest paid and other charges.

Before you jump on to any deal it is suggested that you approach toward professional and experienced auto finance company that will understands your requirements and desire to own a decent car, and also help you with find low interest auto finance. A specialized auto finance company will compare your credit history report and offer you the affordable interest rates for the new or used vehicle financing you needs. This will make you a car owner, without you actually worrying about financial scruples.

The Disadvantage Of Factoring Receivables – Why Confidential Accounts Receivable Finance Works!

Looking for a creative, ‘outside the box’ Canadian business financing solution? You may have investigated factoring receivables already but either didn’t understand how accounts receivable financing works, or, probably more to the point weren’t comfortable with how it works for your firm on a daily basis.

We’ve got the perfect solution for those worries, and its called confidential receivable financing, in Europe its more commonly known as C I D, confidential invoice discounting.

Let’s examine why this type of business financing works in general, and then let’s focus in on why our solution makes a solid solution even better.

In general terms when you ‘factor ‘ your receivables you essentially sell them to the factoring firm. That can be done on a one of basis, on a periodic basis, or all the time. That’s one of the key advantages of this type of financing, you only use what you need, and… More importantly, you only pay for what you use!

Paying for what you use in accounts receivable financing is key because factoring, in general terms can be a more expensive type of financing. We say ‘can be’ because quite frankly if you use it properly it actually could be a cheaper method of financing than your bank. That’s a point our clients are always amazed at when we discuss this type of Canadian business financing.

The cost of factoring receivables can be significantly offset, or in some cases removed completely by your firm using these funds to take supplier discounts and purchase more efficiently and at better prices.

And… Think about this carefully, if you can finance your receivable the days you issue the invoice (that’s what factoring does) then you are in a position to generate funds to sell more products and services to your customers, generating additional margins and profits. Or, of course, you could take the non factoring approach and wait for your customers to pay you in 30, 60, or… dare we say it, 90 days. And that hasn’t worked for you in the past, which is why you are looking for a better solution.

So lets examine how factoring works, and lets get you over the hump, so to speak, on why our preferred type of accounts receivable financing is confidential invoice discounting.

When you generate an invoice under a factoring receivables agreement you receive 90% of the invoice in the form of immediate funds the same day. The other 10% is a holdback, and is remitted back to you promptly when you customer pays, less the financing charges, which are typically 1.5 – 2% for a 30 day period.

In 99% of traditional factoring arrangements the factor company verifies your invoice with your customer and actually collects it. Under confidential invoice discounting you bill and collect your own receivables, and are in a position to finance your firm without your customers and suppliers having anything to do with how you finance your business.

Speak to a trusted, credible and experienced Canadian business financing advisor on why confidential accounts receivable financing will work for your firm, allowing you to supercharge that cash flow and those profits!