If you have a house to sell or if you’re thinking about selling, maybe you’re thinking about seller financing instead of selling your house on the MLS (on the market). But if you have a mortgage on your house, you might be asking yourself, “Can I do owner financing in OK if I have a mortgage on the property?” We get this question a lot so we decided to answer that question here… Keep reading in this blog post and we’ll answer that question and give you some strategies to move forward…
What is Owner Financing?
When you buy a house for owner financing, the seller will make you an agreement to pay directly every month, rather than mortgage payments. The main benefit of an owner financing agreement is that it allows buyers who may not qualify for traditional financing from a bank or mortgage company because of their credit score, income level, or other factors. It also allows sellers who are looking for more control over how they sell their property.
You have some options
Homeowners who are thinking about selling have several options. They can list their home through an agent, or they can list it themselves, or they can sell directly to a buyer. And, many homeowners 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 reverts to the buyer
Homeowners love it because it’s a great way to sell and a great way to find even more buyers – including those who might not be able to get traditional bank financing. Home buyers love it because it means more choices for them and they don’t have to necessarily impact their credit score to get a house.
If you own your house outright, you can do a seller financing agreement. But what happens if you have a mortgage? Maybe you’re wondering, “If I already have a mortgage on the property can I do owner financing in OK?”
The short answer is: it’s complicated.
Seller financing with a mortgage
You can extend a mortgage by giving the buyer a “wraparound mortgage” with a higher interest rate while still paying your own mortgage to the bank. However, this is not legal in all states and all situations, and there are additional clauses that you should be aware of.
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 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 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, 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 can walk you through those options and help you out ourselves or we can connect you with someone who can help you.
Get in touch with us today by clicking here to fill out the form or by calling us at (405) 400-0957.