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

A conventional loan is one that is issued by a traditional lending institution, such as a bank or a credit union. These traditional lenders will usually offer a loan on terms that are generally more favorable than an owner-financed loan. An owner-financed loan, on the other hand, is a loan that is issued directly by the seller of a property instead of by a traditional lender. The seller is taking on the role of the lender and in exchange for the buyer’s promise to pay back the loan, they give the buyer the deed to the property. The terms and conditions of the loan are established directly between the buyer and the seller, so they can be more flexible than a conventional loan. The key difference between the two types of loans is that traditional lenders can offer more protection to buyers with conventional loans. This is because they are regulated and subject to the laws that apply to lenders. A seller who is providing an owner-financed loan is not regulated, so a buyer needs to do more due diligence and make sure that the terms of the agreement are in the best interest of the buyer.

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

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