Owner financing an option for selling home

People who have paid off their mortgage and are looking to sell their home may want to consider owner financing.

The legal agreement is becoming increasingly popular across the country, with experts estimating that it is used in 10 to 15 percent of today's home sales, reported AOL Real Estate. The concept is fairly simple: instead of obtaining a mortgage from a bank, a homebuyer would obtain financing by taking out a loan with the property's seller. Like in a traditional loan, the two parties would agree on a purchase price, down payment, and monthly payments. The buyer would then make their payments directly to the seller until the property is paid off.

Owner financing is not for everyone and should typically only be used by sellers who have paid off their mortgage and think they can gain $200,000 (or $500,000 if they're a married couple filing a joint tax return) from the transaction, said AOL. It can also provide tax benefits by spreading out capital gains tax payments over time.

Moving into a new home might be delayed if a homeowner can't sell their old property, and this method may be worth discussing with a financial consultant.

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