In a house 'for sale by owner' situation, can the owner act as his/her own banker?

Be paid monthly installments after determining the sale price, downpayment, monthly payments, interest (comparable to local bank rates), and payback period (in years); all agreed upon by the buyer?In a house 'for sale by owner' situation, can the owner act as his/her own banker?
Yes. But you also have the burden of making sure the new owner pays the taxes and maintains insurance on the home (your collateral). If they don't, you have to go obtain them to avoid losing your collateral and then try and get the money back from the borrower.





If they don't make the payments, I believe you have to follow the same strict rules on processing foreclosure as any other lender, much harder in states that have judicial foreclosure.





If it gets too much for you to handle down the road, there is a market that buys these arrangements but I'm not sure how you would make out selling the mortgage to them. They are going to want to see a detailed payment history before offering you a price, so you will have to keep very good records.





If the buyer is suggesting this to you, could it be because they can't find financing elsewhere? That's an indication that you could be taking on a potential headache down the line. Don't buy trouble; you can get enough for free :).





Also, you are tying your money up in a 5-6% investment for many years. That rate is attractive today, but when things get better you'll be moaning because you can't reinvest for better returns.





The upside is that the older the loan gets, the less you will pay in income taxes on the same cash flow, because the bulk of the payments are repayment of principal and not taxable interest income.In a house 'for sale by owner' situation, can the owner act as his/her own banker?
YES IT IS CALLED ,OWNER FINANCING,AND IT IS LEGAL.
sounds like you are asking if the owner can carry the note, answer is yes, if they want