Can I Do Owner Financing In Kansas If I Have A Mortgage On The Property?

Are you looking to sell a house? Maybe you are thinking about selling, but you may have even considered using seller financing, even though it is usually for fully owned homes. If you have a mortgage on your house, you may be wondering, “Can I do owner financing in Kansas if I have a mortgage on the property?” Sellers ask this question very often so we pride ourselves in providing the answers to this question. In this post we’ll provide some clarity to this question and give you some strategies to help you move forward towards selling your home…

You have options

As a homeowner, you have several options when you are thinking about selling. You can list your home through an agent, list your home yourself, or sell it directly to a buyer. An option growing in popularity include “owner financing” or “seller financing”. This allows the seller to sell their home to a buyer and collect regular payments for the house. Owner financing works as follows:

  1. The buyer makes a down payment
  2. The buyer pays regular monthly payments
  3. When an established amount of payments are made, the title reverts to the buyer

This concept is popular because it’s a great way to sell and it expands the number of potential buyers you could have—including those who are not eligible to obtain traditional bank financing. Home buyers also love it because it provides more options for buying homes than using a traditional bank and it causes less impact on their credit score.

If you own your house fully, you can implement a seller financing agreement with few obstacles. Which leads us back to the question, “What happens if I have a mortgage?”  Maybe you’re wondering, “Can I do owner financing in Kansas if I have a mortgage on the property?

Yes, but it’s complicated.

Seller financing with a mortgage

In some states, it is possible to create a “wraparound mortgage” in which you extend a mortgage to a buyer (usually at a higher interest rate). However, you will still make payments on your own mortgage. It is worth mentioning that this is not legal in all states nor all situations. If you want to attempt this you should be well informed of what is legally required.

Can I Do Owner Financing if I Have a Mortgage on the Property? – You have choices

If you are unable to sell using seller financing due to a mortgage, you still have other options…

An alternative possibility that might work for you is a rent-to-own agreement, which has some similarities (ongoing payment and you own a house) and some differences (there is not always a down-payment and the buyer must find a mortgage agreement by the end of the pre-established rental term agreement).

If you are considering owner financing, but may be restricted in using it, contact us so that we can discuss your property. We are experts in real estate markets and are up to date on several options that you may not have considered. We can inform you about your options or we can connect you with a professional who can offer you further guidance.

Get in touch with us today by clicking here to fill out the form or by calling us at (316) 413-8314.

 

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