Buying a home on contract, also known as a seller-financed mortgage, is an alternative homebuying method that involves a direct agreement between the buyer and the seller, without involving a traditional mortgage lender. Unlike a standard mortgage, in a home-on-contract arrangement, the seller holds the title to the property until the buyer fulfills the agreed-upon payment terms, after which the ownership is transferred to the buyer.
There are several advantages to buying a home on contract. Firstly, it can offer more flexibility compared to conventional mortgages. The terms of the contract can be tailored to meet the specific needs of both the buyer and the seller, providing greater control over aspects such as the down payment, interest rate, and repayment schedule. Secondly, it can be an option for buyers who may not qualify for a traditional mortgage due to factors such as a lower credit score or a higher debt-to-income ratio. Additionally, it can be a suitable option in areas where traditional financing options may be limited or unavailable.
