Guys, I need your help. I have a house and I have a mortgage on it. Can I still do owner financing with the current mortgage in place ? If yes how can I do that?
Thanks for all your help.
RK
RKY
Good to meet you
Yes. You can offer seller financing a few different ways…
Contract for deed (Land Contract . Performance Contract)
AITD (Wrap)
Subject to with Junior Position (Second position carry back)
Lease Option
Good Luck
Michael
Thanks for the response Michael. So how does the title work ? Dont we have to have the new guy’s name on the title too ? What shows that he is the owner of the house ?
Thanks again
RK
That depends on the type of transaction. Title doesnt transfer on a land contract or option until performance takes place. However on a wrap or seller carry it does.
Also remember the type of contract you do will depend on how you go about terminating the contract if the buyer to be fails to pay you. In some contracts you would have to foreclose on yourself to get him out especially if Equitable Interest is proven.
Also depending on contract will control what tax advantages you can claim.
I have had consistent negative feedback in court when reclaiming property on land contracts or contracts for deeds that I have financed to buyers. The Judges do not seem to like these and I would recommend you research your county/state courts and their position on this before using that method.
Lease purchases work well in your situation. Many banks will actually refinance off of a L/P which has significant value by using ‘current market price’ vs. contract price.
Also, wrap mortgages can work, especially if you are using a trust to hold the property during your contract period although that is not required.
Rob
wrap around mortgages can cause you a lot of trouble in the legal system.
technically they trigger your due on sale clause and you are aware of it when you do it.
lease with an option to purchase will be your better option.