can I sell my home land contract or lease to own if I still owe a mortage on it?

Asked by Shirleyms53, Susquehanna, PA Sun Dec 4, 2011

I would like to sell my home lease\rent to own or land contract,is this possible because I still owe a morgage on it?

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Annette Lawrence’s answer
Annette Law…, Agent, Palm Harbor, FL
Mon Dec 5, 2011
Shirley, I am not a real estate agent licensed in NY. However, I find there are many opportunities available to solve problems for those who are well prepared.

Give Thomas a call and find out his process for dealing the 'Due on Sale' clause. This issue is NOT a dead end in Florida but may be so in NY. Of course, NY real estate nearly always involves attorneys so it must pass the attorneys review also.
1 vote
Shawn Ryan R…, Agent, Belleville, NJ
Mon Dec 12, 2011
the proceeds from the sale must cover the outstanding balance on the mortgage.
0 votes
Don Tepper, Agent, Burke, VA
Mon Dec 5, 2011
Sure you can do a lease-to-own. Lots of lease-options and lease-purchases are done on properties on which there's a mortgage.

One potential risk (which a couple of folks referred to) is the "due on sale" clause. That's a clause in the seller's mortgage that says that if the owner sells or transfers an equitable interest in the property without the lender's approval (and the lender won't approve), then the lender can immediately call the loan. Most loans--except for the very few that are assumable--have a "due on sale" clause.

As a practical matter, it's unlikely that the lender will foreclose on a property where the payments are current and coming in on time . . . though, technically, it could happen. There are a number of strategies to reduce that risk; a Realtor familiar with lease-options can advise you on them.

Hope that helps.
0 votes
Anna M Brocco, Agent, Williston Park, NY
Mon Dec 5, 2011
Consult with an attorney who specializes in real estate with all questions; generally you can lease the property, but not to own until your current mortgage is satisfied...
0 votes
Dawn Roessi…, Agent, Binghamton, NY
Mon Dec 5, 2011
Shirley, you may lease it or rent it out and cover your mortgage payment but more likely not a land contract. You would need to talk to your attorney and see what they may suggest.
0 votes
Suzanne Krau…, Agent, Vestal, NY
Mon Dec 5, 2011
Unfortunately your lender will not allow that. It is a good idea to check with your real estate attorney too
0 votes
Gail Gladsto…, Agent, 11743, NY
Sun Dec 4, 2011
You do not have clear title until it is fully paid. You can lease it, but not to own.
0 votes
What do you mean "lease it" if it's not to own eventually?
Flag Tue Aug 11, 2015
Thomas Reid, , Binghamton, NY
Sun Dec 4, 2011
More than likely no... Call me and we can discuss your options

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