Are you considering selling your house with owner financing? If so, great choice. Owner financing offers homeowners quite a few key advantages that make it an attractive home sale option. These advantages include a faster sale timeline (due to the fact that your buyer base will be opened up to a larger audience that includes non-traditional buyers) and higher overall sale prices.
However, this home sale option isn’t for everyone. While the pros of owner financing may be enchanting to many homeowners, the unfortunate truth is that only certain types of sellers can actually pull this type of real estate transaction off. To be able to sell your house via owner-financing or FSBO, quite a lot of work is required on the owner’s part. In addition to this, these home sale methods require significant start-up capital, as well as professional-level real estate knowledge. As such, it becomes clear that they’re not the best options for the average person.
On the other hand, if you have a mortgage on your house, you might be wondering, “Can I do owner financing in MN if I have a mortgage on the property?”. Below, we are going to help you answer this question. For more information on owner financing, you may also want to read our post on How To Sell A House By Owner Financing In Bloomington MN.
Can You Choose Owner Financing When You Have a Mortgage in Richfield MN
Read on to discover if owner-financing would be a great home sale option for you if you have a mortgage in Richfield MN.
But What is Owner-Financing
First thing first, before we can talk about owner-financing and whether you can do it with a mortgage, we must first define what this home sale method is. Over the last few years, many homeowners have been discovering an alternate strategy called “owner financing” or “seller financing”. This alternative home sale method allows home sellers to sell their houses to a buyer over a longer period of time and collect regular payments:
- 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
Many homeowners love this option because it’s a great way to expand one’s buyer base – by including those who might not have been able to get traditional bank financing. Homebuyers also love it because it means they won’t have to worry about paying the full amount upfront or applying for a mortgage loan.
Seller financing with a mortgage?
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, “Can I do owner financing in MN if I have a mortgage on the property?”. The short answer is: it’s complicated.
In some states, you can create something called a “wraparound mortgage”. This is when you extend a mortgage to a buyer (usually at a higher rate of interest) 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.
However, If you’re unable to sell with seller financing because of a mortgage, you have another option. And that option is to contact us here at FastPath Home Buyers. We buy houses in Richfield MN and offer great prices. In addition to this, we are also real estate experts in buying and selling real estate. Therefore, we are aware of a number of options that you might not know about. We can walk you through those options.
To learn more about what we can offer you, simply reach out to our company either by calling (612) 351-2384 or by filling out the short form below.
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