In house lending is a type of seller financing in which a company or broker will help a customer obtain a loan at their place of business to purchase any product or services. When using in-house lending one does not have to rely on 3rd party company or business to complete the transaction.
In the real estate industry most home builders will use an in-house lender and often offer buyer incentives by processing the loan through their own mortgage company. In-house mortgage companies are sometimes scrutinized by other mortgage companies because outside or 3rd party mortgage companies cannot compete with their internal market rates or discount lending incentives that the builder offers.
Consumers can typically apply for in-house loans by visiting the business which is typically a brick and mortar. One can ask for special financing with the sales representative and they will usually direct him to see their lending specialist. There are some in-house lenders that are able to originate the transaction on-line for on-line buy here pay here dealerships and websites. At times it can be a challenge to discover who is actually using in-house lending or if they are using a bank, credit union on the back end to finance the transaction.
In the new car auto industry you will often find a finance manager or lending team that is willing to help find a funding bank to extend credit. For some used car dealerships they will often resort to funding the transaction by using their own business capital and payment coupon booklet to help a buyer who may not qualify through a traditional bank or finance company.
- ^“in-house financing”. Business Dictionary. Retrieved 21 December 2012.
Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder of TBIL.co STATX Fund.