Selling A Home With Owner Financing When You Have An Existing Mortgage

2010 February 17

I get quite a few questions about whether someone can sell a home with owner financing with an existing mortgage. The answer is a definite maybe. Sorry for my weird sense of humor but since every state and every mortgage lender has different laws and rules, it’s impossible to give a definitive answer for everyone. However, I will say this. For most states and many lenders, you can issue what is called a Land Contract. You should check with an attorney and possibly your mortgage company before going this route. A land contract or what some call a contract for deed doesn’t transfer title but allows someone to minimize or even eliminate the burden of a mortgage payment by receiving payments from the buyer to offset their mortgage. You can even sell a land contract to a land contract buyer or private mortgage buyer as long as you get enough money from selling a land contract to pay off your existing mortgage. In some cases your mortgage company might let you do a small second if you are just a bit short if you have good credit and a great pay history. It never hurts to try.

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