Owner financing prospects in 2024.  Owner financing and selling owner-financed mortgage notes has gained popularity in real estate markets. These alternative financing options offer flexibility for both buyers and sellers, and the prevailing market dynamics will influence prospects for 2024. 


Owner Financing

Owner financing is a method of financing that allows the seller to function as the lender, enabling buyers who may not qualify for traditional bank loans to buy property. The seller receives regular payments from the buyer, typically including principal and interest, just as a bank would. These payment arrangements are legally documented through promissory notes, mortgage notes, deeds of trust, bonds for title, contracts for deed, or land contracts. 


Market Dynamics and Selling Owner-Financed Notes

Current market trends such as interest rates, the pending presidential election, and note-buying companies will affect those who own and are planning to sell owner-financed mortgage notes this year.


Interest Rates

As interest rates increase, the value of owner-financed mortgage notes may decrease. This is because potential buyers will demand a higher yield to compensate for the rising interest rates. Conversely, when interest rates fall, the value of notes may increase as buyers are willing to accept a lower yield.

For example, American Equity Funding recently quoted the value of a mortgage note influenced by dominating interest rates. The seller had hoped for a larger return and did not accept the price. If interest rates drop one hundred basis points (1%), we can meet the target price, which could happen later this year. Adversely, if interest rates continue to rise, the offer may be lower for the mortgage note. 

While the real estate market cannot predict future interest rates with certainty, present trends, and professional advice offer insight. The Federal Reserve has shown a cautious approach to interest rate adjustments in 2024 and will watch economic indicators like inflation and employment rates. It is advisable to stay updated with reputable financial news sources to follow developments that could cause interest rates to change. 


Presidential Election

Historically, elections have influenced interest rates. Changes in leadership and policies affect the economic landscape, and it is difficult to accurately predict the outcome. It is prudent to stay informed of proposed economic policies by the presidential candidates and their impact on financial markets. 


Owner-Financed Note Buying Businesses

Various businesses specialize in buying owner-financed notes, mortgages, and land contracts. These companies evaluate the terms of a note, the creditworthiness of the payer, and the property’s value. Pending approval, they offer a lump sum payment in exchange for future payments received by the seller, supplying an avenue to liquidate these assets. Researching and choosing a reputable company with fair pricing and transparent processes is essential. 


American Equity Funding has been buying owner-financed notes since 1990. We have an A+ Better Business Bureau rating that ensures friendly, professional, and prompt service. 

Please call Ryan or Steve at 1-800-874-2389. All inquiries are welcome!


2024 offers bright prospects for owner financing and selling owner-financed notes! Being aware of current interest trends, the pending presidential election, and companies specializing in buying owner-financed mortgage notes will help to successfully navigate this dynamic real estate market.