Personal Loan? Mortgage Loan?

You borrow $20,000 from a bank, credit union, savings and loan, etc. if you can find one that will loan you the $20,000.

You give the $20,000 to the escrow company that you picked to do the paperwork, note and contract. When they get the Trust Deed and other paperwork signed by everyone, they will forward the money to the seller.

I strongly advise you to make the payments to the escrow company, so they will compute the interest and principal, and then forward the payment to the seller. It creates a permanent record of your having made the payments, and prevents future mis-understandings of how much of each payment is interest and how much is principal, and they will give you the Deed when it is paid in full.

You may never have one of those problems with the seller, unless he gets old, senile or dies and you have to deal with the relatives.

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you go to the bank and get the loan and pay it monthly just like a mortgage. BUT if you were approved why are you doing owner financing this can be risky as if they go into foreclosure then you loose all. Don't do this but if determined then get the home inspected and only do this 1 year as a land contract with provisions of getting all back if they get a notice of default or default on their current loan in writing and witnessed by a notary. Also pay by check only and keep the 12 months and you can refi this loan asap

I am a mortgage banker in TN & KY

IF you don't have a down payment, you're NOT ready to buy. You will have no equity in the home, only loan upon loan. Suggest you spend 6-15 months saving for down payment and building your credit rating, then buying.

I think you're talking about Installment for Deed, Rent to Buy, or owner financing. Get an attorney to represent you before signing any contract. It costs $200-500, and can save you from making serious mistakes.

FHA requires minimum 3.5%, and prefers 5% down. If you put less than 20% down, you have the extra cost of PMI because you are a higher risk buyer. Having no down payment at all, entirely borrowed down payment, makes you VERY high risk borrower. And personal loans are generally at significantly higher rates than mortgages.