Owner finance a house with a mortgage???

[BowSlayer]

I have a couple of rentals that I have mortgages on. Is it possible for me to sell them with owner financing while I still owe the bank for them? I tried looking online for information on this and can't find anything definitive.

[JayB]

Can be tricky. Read your loan docs to see what they tell you. Most lenders say NO.

[BigCountry101]

Sounds like a mess. Imagine if bank foreclosed on one of the houses and then when they go to take house the renters/buyers are thinking they are good because they are up on payments to you.

Not saying this would happen in your situation.. but I can see why it would be in the mortgage companies best interest to not allow this. And for that matter in the buyers best interest to ensure there aren't any other liens against a property they are purchasing, even when owner financing.

[CabezaBlanca]

My guess is no.

[mww982]

Most lenders have a balance due on sale clause in the mortgage. Meaning the mortgage can be called due up on sale of the house.

The reason for this is that you met the lenders conditions for the loan and were willing to loan you the money. The person you are selling to may not meet the loan conditions set forth by your lender and they don’t want to assume that risk.


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[AntlerCollector]

Sounds like a mess.

[BowSlayer]

I didn't think it would really be possible. Just trying to figure out a way to allow the tenants to continue with monthly payments as if they were renting but if something breaks it isn't my problem.

[AntlerCollector]

I didn't think it would really be possible. Just trying to figure out a way to allow the tenants to continue with monthly payments as if they were renting but if something breaks it isn't my problem.

Lol that is the ideal scenario for you


Maybe write up a rent to own agreement with them. They get the title when it’s paid in full.

[BowSlayer]

Lol that is the ideal scenario for you


Maybe write up a rent to own agreement with them. They get the title when it’s paid in full.

It's the ideal scenario for them also. They don't have the credit to get a conventional mortgage.

[TeamAmerica]

I didn't think it would really be possible. Just trying to figure out a way to allow the tenants to continue with monthly payments as if they were renting but if something breaks it isn't my problem.

Best bet is a property management company and a home warranty. Both will eat into your cash flow.

[Jaker]

I didn't think it would really be possible. Just trying to figure out a way to allow the tenants to continue with monthly payments as if they were renting but if something breaks it isn't my problem.

Rent to own

[W E H]

Contract for deed is a much better way than rent to own. Set stipulations. Basically fulfill the contract, get the deed.

It’s called a wrap loan when another “first” lien is on the property and it is being sold “subject to” and the Bank‘S original lien amount is disclosed and the buyer is buying knowing full well there is another loan (Lien) on the property besides the one you’re making to them.

You have to send them notifications of what has been paid in taxes, insurance and principal and interest amounts.

You need to escrow the taxes and insurance. That’s where people get in to trouble if it’s not collected monthly.

[outlook8]

Rent to own

Yep. You’ll need a some type of lease to own agreement. Not sure you can do that with a mortgage though.

[Mertzon Man]

PM “Learjet” he may know.

[TXJIM]

There will be a provision in the Dead of Trust that requires you to pay off the mortgage before selling any interest in the property to a 3rd party. If the bank finds out that you violated the Dead of Trust they can require you to pay it off immediately.

You should be able to locate this document in your closing paperwork that was signed at the title company when you closed on your loan.