We buy houses in Washington. If you’re thinking of selling your house using owner financing, be sure to carefully read this blog post to learn the options you have with owner financing (also known as “seller financing”). You might be wondering if you have a mortgage, can you owner financing the house you want to sell? We’ve gotten this question quite a few times so we’re finally answering it here: “It’s complicated.” Read below to get some strategies to move forward...
Is Owner Financing Possible With A Mortgage In DC?
You Have 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, “Can I do owner financing in Washington DC if I have a mortgage on the property?”
The short answer is: It’s complicated.
Seller Financing With a Mortgage
In some states, you can create something called a “wraparound mortgage” in which 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.
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.
Did you enjoy this post? Check out some of our other blog posts covering topics such as short sale vs. foreclosure.
We Buy Washington Houses
We buy houses in DC. If you think you need to sell your house in Washington fast, then you may need an investor. The House Guys are local homebuyers in Washington and we’re helping local homeowners solve their housing problems quick and hassle-free. If your house in Washington qualifies, we can make you a quick and fair cash offer.