Home Selling in Binghamton>Question Details

Shirleyms53, Home Seller in Susquehanna, PA

Can I sell my home owner finance even though I still have a mortage on it,and just continue to pay the monthly payment?and buy a home through bank?

Asked by Shirleyms53, Susquehanna, PA Wed Oct 26, 2011

Can I sell my home owner finance even though I still owe a mortage on it,I would still make the monthly payments?and would a bank give me a mortage for another home to live in?

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Erica Ramus’ answer
I have done this but it's called an INSTALLMENT contract not a true transfer. The "buyer" is a tenant until everything is satisfied, technically, and until the buyer makes the final payment. You are really not transferring the house or putting the deed in buyer's name until final payment is made. I have had an attorney do the paperwork when I did this. Call a local real estate attorney. And at the point the deed is transferred to buyer YES you must have your old mortgage totally paid off and satisfied.
0 votes Thank Flag Link Wed Oct 26, 2011
No, you cannot sell a property without satisfying the loan on it.
0 votes Thank Flag Link Wed Oct 26, 2011
You can not transfer ownership as most mortgages become due and payable. If you tried it, the mortgage will still be a lien to the house and teh new buyer could not sell it or refinace without paying it off.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Wed Oct 26, 2011
Sure you can sell it that way. It could be structured in a number of ways--such as a wrap mortgage. Or a contract for deed.

However, recognize that you'll be violating the "due on sale" clause in your mortgage. The "due on sale" clause says, essentially, that if you sell or transfer ownership of the property, or any part of it, then the lender can call the loan due and payable immediately. Theoretically, that's a problem; the lender could foreclose. Practically, in today's market, almost no lender is going to care so long as it receives the monthly payments. It's a risk--a very small one today--but one you should be aware of.

Would a bank give you a mortgage on another property? Simple answer: No. Better answer: Possibly not. The reason is that you'd still be responsible for the mortgage on the first property. You haven't gotten rid of it. So the lender is going to consider your total debt and your total monthly obligations. Yes, you're receiving money from the buyer but--similar to renting a place out--a lender won't give you full credit for the amount you're taking in. And you're in a weaker position--you still owe on the mortgage on the first house, but you've transferred ownership in it. Now, if you have enough income, you can do it. To be sure, check with a lender or mortgage broker.

Again, check with a lender . . . and a lawyer . . . for more information.

Hope that helps.
0 votes Thank Flag Link Wed Oct 26, 2011
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
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Does your agreement give you the right to sell the property; in order to best protect yourself, consult with an attorney who specializes in real estate beforehand. To see if you qualify for a mortgage, do visit with any loan officer(s)....
0 votes Thank Flag Link Wed Oct 26, 2011
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