The Best Financing Options for Buyers and Sellers in 2025

By Linda Welsh

Specialize in representing savvy Buyers and Sellers for residential, second home, vacation properties, lake and hill country properties, new and existing homes, land and lots. Relocation services include area, community and neighborhood expertise and helping the entire family to find the perfect home to meet their needs and wish list.

As we approach 2025, interest rates are expected to lower, creating exciting opportunities for buyers and sellers. Understanding the various financing options available will help you navigate the market more confidently, whether you’re looking to buy or sell. Let’s explore some valuable financing strategies to consider for the upcoming year.

1. Assumable loans. If you currently have a conventional loan, such as an FHA or VA loan, you may have the option to offer an assumable mortgage to potential buyers. This allows buyers to take over your mortgage, potentially at a lower interest rate. With a VA loan, buyers don’t necessarily need to be veterans, but they must apply and be approved by the lender, meeting all requirements.

Similarly, if you have an FHA loan, it is likely also assumable. This could be a significant advantage for buyers, helping your property stand out by allowing them to secure a mortgage at a lower rate than what may be available on the market at that time.

2. Seller financing. Another option to consider, especially if you’ve owned your home for a long time or have paid it off, is seller financing. Offering seller financing could provide you with a reliable income stream at a competitive interest rate. Even if interest rates are in the mid-to-high 5% range in 2025, offering a rate around that range could attract more buyers and give you a steady income.

If you have significant equity in your home, seller financing could be a viable solution. For example, if your home is valued at $800,000 and you have a mortgage balance of $400,000, the buyer would need to provide $400,000 as a down payment. If your home is fully paid off or nearly paid off, the down payment would only need to cover the mortgage amount or provide you with a sense of security you’re comfortable with.

3. Balloon payment. You may also want to include a balloon payment in your seller financing agreement. A balloon payment means that the buyer will need to refinance the mortgage after 2 to 3 years. This option allows you to receive income from the property in the short term while ensuring the buyer will pay off the mortgage in a few years.

4. Buying before selling. For those looking to buy a home before selling their current property, there are specialized financing programs available. The stress of selling first and potentially missing out on a new home can be overwhelming. Fortunately, some lenders offer solutions that allow you to buy before selling, eliminating the pressure of making an offer contingent on your sale.

In 2025, various financing options will present new opportunities for both buyers and sellers. Whether you’re considering assumable loans, seller financing, or buying before selling, these strategies offer substantial benefits in a fluctuating market. If you need guidance or have questions, don’t hesitate to reach out. Contact me at 512-657-4033 or email me at linda@lindawelshrealty.com. Let’s find the best strategy for you this 2025!