Do you have a house to sell? Perhaps you’re thinking about selling, and maybe you’re thinking about seller financing. Which one is right for you and how to know which one to choose. These questions are great. But, if you have a mortgage on your house, you might be wondering, “Is this still doable?” “Can I still do owner financing in KYwhat do I do if i have a mortgage on my property?” This is a good question and one we get a lot so we’ve decided to address the question here. Maybe answer a few questions you didn’t originally think of and explain what this includes and the options that I can choose from.. Keep reading in this blog post and we’ll answer that question plus give you some extra strategies to move forward with…
You have options
Homeowners who are thinking about selling have several options. They can list their home through an agent, they can list it themselves, or they can sell directly to a buyer. You may think “well, isn’t that all the options?” No. there are many homeowners who are discovering a simple strategy called “owner financing” or “seller financing” that allows them to sell their home to a buyer and collect regular payments that pay off the house:
- The buyer pays a down payment
- The buyer pays regular monthly payments
- When the agreed-upon price is paid, the title in turn is given to the buyer
Homeowners love this because it’s a great way to sell and a great way to potentially find even more buyers – because it includes those who might not be able to get traditional bank financing, due to financial difficulties or hardships in their past. Home buyers alike love it because it means more choices for them and this doesn’t have to necessarily impact their credit score to get a house.
Here’s how it works. If you own your house outright, you can do what is called a seller financing agreement which we’ve explained. But, what happens if you have a mortgage on the property you’d like to “sell”? Maybe you’re wondering, “Can I do owner financing in KY if I have a mortgage on that same property?”
The short answer is: it’s complicated.
Seller financing with a mortgage
In a few states, you can do something called a “wraparound mortgage.” It’s when you offer a mortgage to a buyer (usually at a higher interest rate) in the middle of you continuing to pay your own mortgage to the bank. But remember, this isn’t allowed everywhere, and there are extra rules you will need to know about.
Can I Do Owner Financing if I Have a Mortgage on the Property? – You have choices
If you’re unable to sell with seller financing because of a mortgage, you do have other options…
An alternative that might work for you is called rent-to-own, which has some similarities (such as ongoing payment and you still own the house) and some differences (there might not be a down-payment and the buyer needs to qualify for a mortgage from a bank at the end of the pre-established rental term).
If you are thinking about accepting owner financing but you still have a mortgage on your property, and all this is a little over your head or you just want someone else to work through this for you or just someone to show you the ropes. Here’s another option for you: Get in touch with us and talk to us about your property. As experts in buying and selling real estate, we are aware of a number of options that you might not know about. We will walk you through those options and help you out ourselves or we can connect you with someone who can help you.