What is the difference between an owner-financed loan and a conventional loan?

An owner-financed loan and a conventional loan are two different types of financing for a residential real estate purchase in California. A conventional loan is a type of mortgage loan that is secured by an asset such as a house. The borrower typically goes to a bank or other lending institution, to secure the loan for the purchase. The lender then holds the title of the property as security for the loan. The lender will also receive the interest payments from the borrower. In contrast, an owner-financed loan involves the seller providing the financing for the purchase. The seller acts as the lender and holds the title to the property until the buyer pays off the loan. The buyer makes payments to the seller instead of a lending institution, and the interest rate is determined between the two parties. The main differences between an owner-financed loan and a conventional loan are the source of the loan and the interest payments. With an owner-financed loan, the buyer makes payments to the seller rather than a lending institution, and the interest rate is negotiable between the two parties. With a conventional loan, the buyer applies for a loan from a lending institution, and the interest rate and payments are predetermined by the lender.

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What is the difference between an owner-financed loan and a conventional loan?

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