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Seller-Financed Mortgage

You may have used this buying option or heard of it before - when the property developer offers you the installment payment plan, usually 2-5 years to repay in full -- that's exactly that. The property owner and lender are the same entity, eliminating the middle-man role of the bank lender (it's not the bank's business to sell property, albeit that's gradually changing in developments markets, post 2008 GFC).

Seller-Financed Mortgage (SFM) can also be know as Seller Financing or Owner Financing, or Purchase Money Mortgage

SFM typically involves two main parties (lender / property vendor + property buyer) as against three parties (lender + property vendor + property buyer) that exist with a traditional mortgage. However, much of the structure associated with a traditional mortgage may still exist with an SFM.

 

How it works

Seller financing works similarly to any mortgage transaction with the exception that the seller (in this case DCANS Mortgage) is extending you the financing rather than another lender or bank. Unlike a traditional mortgage closing, the only money the seller receives at closing is whatever amount was negotiated for a down payment, if any.

When financed by an SFM, the consequences of default may be laid out in a promissory note or in a separate document. If you don’t have the money to make a balloon payment when it comes due, people with improved credit will refinance the cost into a traditional mortgage.

 

Transaction Structures

The commonality here is that in many aspects, SFM functions like traditional financing. All houses to be mortgages are always owned free and clear by DCANS Mortgage and/or its in-house providers before mortgage paperwork are completed. We (the seller via the SFM structure) and buyer work out the terms of a down payment, final purchase price (when the loan will be paid off) and interest rate.

It’s important to note that all our mortgages contain a “due on sale clause.” This means that as soon as the property is sold on by the mortgage holder, we will demand payment.

It’s important to also note that, you don’t get the title right away. Rather, DCANS Mortgage (seller) holds the legal title to the property, which is given to you once the seller is fully paid off. While you don’t get the legal title immediately, you do gain equitable title. This means that with each payment you make to the seller, you gain financial equity in the property.

 

SFM Benefits

• It allows prospective homebuyers who might not otherwise qualify the ability to get a mortgage.

• The closing process may be quicker and cheaper.

• Down payment amounts are negotiable with seller financing in a way that they usually aren’t when it comes to traditional mortgages.

 


 

Related Pages

Regulation & Compliance

How We Operate

Why Choose Us

YOUR HOME (OR COMMERCIAL PROPERTY) MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBTS SECURED ON IT - REPAYMENT ASSISTANCE PROGRAMME AVAILABLE FOR QUALIFIED CUSTOMERS. ALL APPLICATIONS ARE SUBJECT TO STATUS AND OUR LENDING CRITERIA - THIS MEANS THAT THE AMOUNT WE WILL LEND YOU WILL DEPEND ON YOUR INDIVIDUAL CIRCUMSTANCES, THE TYPE OF PROPERTY AND THE AMOUNT YOU BORROW.

We are Non-Deposit Taking No Upfront Fee Direct Lenders (not brokers). Terms, conditions and rules govern our operations, so if you disagree with any of them in part or in whole, please don't use our services. All loanable funds are private patient capital from dedicated sustainable and reliable sources and not sourced funds from the general public. We're Fully-Compliant: Our mortgages are structured as Seller-Financed Mortgages (SFM) and where applicable, as Commercial Mortgages, which do not require Bank of Ghana (BoG) regulation. Legal & Compliance Provided by TLA Firm & Ghanaian Partners. For more details, see Regulation & Compliance.

© 2021 DCANS Mortgage, Ghana, affiliated to DCANS Mortgage UK (FCA-Compliant), Proprietary Trading Firm DCANS FX, Ghana's Biggest BNPL Provider DCANS Pay, UK's One-Stop Earned Wages Provider Quid Pay, No Upfront Fee Non-Deposit Taking Direct Platform Lenders Sikamaster Loans (Ghana) & Quidmaster Loans (UK), UK-based Remittance Platform to Africa & Beyond Moneyafrique, TDG Startup Ecosystem Funders [GhanaStartups.org ++ UKStartups.net ++ EUStartups.net] and DCANS Capital Limited (CRN: 07970200), are all part of the AML-Compliant TDG GLOBAL CREDIT SYSTEM of The DCANS Group (TDG) Limited (Registered in England & Wales, CRN: 12645872, VAT #: GB 157 9161 82), but dual-headquartered in Ghana & the UK.

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