In-House Financing

When we’re looking to buy a house, we usually get pre-approved for a mortgage loan amount before we pick out the house. With in-house financing, we don’t need to do that; in-house financing means that the company we’re trying to buy something from offers its own financing options that don’t require going through a bank.

We’re not going to see this a lot in the world of real estate (though it does exist), but we see it all the time when we’re trying to buy a car or a new dining set. That’s because car dealerships and other companies who sell large, somewhat expensive items (think furniture, electronics, dental implants, etc.) often use in-house financing to attract buyers.

Maybe we can’t afford a new dining set all at once. Instead of just not buying it, or having to go to a big scary bank and take out a big scary loan, the furniture store might say, “Hey, we got you” and offer us a payment plan: no down payment, no sales tax, no payments until the year 2052. This way, everyone’s happy: we get a snazzy new dining set, and the furniture store gets a new customer who is going to be paying them for that snazzy dining set (and thus contributing to their revenue) for the next several decades.