People often ask about the difference between seller financing and owner financing. In everyday real estate use, they describe the same idea: the property owner/seller provides financing to the buyer.
Same structure, different wording
- Seller financing emphasizes that the seller is the lender.
- Owner financing / owner will carry emphasizes that the owner carries the note.
- Both usually involve a promissory note plus a security instrument (mortgage or deed of trust).
How both differ from a bank loan
- Credit standards and terms are negotiated between buyer and seller, not set by a bank underwriter.
- Payments typically go to the seller (or their servicer), not a traditional mortgage servicer.
- Existing mortgages, due-on-sale clauses, and state rules still matter—use local counsel.
What to document either way
Price, down payment, rate, amortizing term, balloon (if any), late fees, insurance, and default remedies should be clear in writing before closing.
Model monthly payments with the OwnerFi Pro calculator, then track the note after you close.
OwnerFi Pro app
Get the OwnerFi App on Google Play or use app.ownerfi.app.