QUESTION
can i sell my house on land contract if i have a bank loan on it
Asked on Jan 21st, 2013 on Real Estate - Michigan
2 ANSWERS
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If you sell your home on a land contract, you will trigger the "due-on-sale" clause of your mortgage. That means your lender could demand the entire balance due immediately. If you couldn't pay it, they could foreclose. Your only options are to get written approval from your lender, or sell the house to the land contract vendee and have the vendee assume the mortgage -- both of which require you spending some time on the phone trying to find a human with enough authority to give you what you need. Finally, get it all in writing, and have it looked-over by an attorney before doing anything.
Vince DeMarco
owenlaw@comcast.com
Answered on Feb 11th, 2013 at 6:02 PM
Consumer Bankruptcy Attorney serving Honokaa, HI
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Barbara L. Franklin, Esq. Attorney at Law
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If you plan to sell your house on an installment land sale contract, you need to review your mortgage document. Most mortgages have what is called a "due on sale" clause stating that if you transfer the property, the loan will come due or accelerate causing the entire balance to be owed to the bank/lender. I would suggest that you seek legal counsel licensed in your state to advise you about the the issue and whether a "wrap-around" mortgage is lawful and practical in your state.
Answered on Jan 25th, 2013 at 10:36 PM