Do you have a house to sell? Perhaps you’re thinking about selling, and maybe you’re thinking about seller financing. But if you have a mortgage on your house, you might be wondering, “Can I do owner financing in Florida 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…
Let’s explore this in more detail and examine what it takes to offer owner financing in Florida even if you have a mortgage.
What is Owner Financing?
Owner financing, also known as seller financing, is when the seller of a home acts as the lender, financing the purchase for the buyer directly. Instead of the buyer getting a mortgage from a traditional bank or lender, they make payments to the seller over time—typically with interest. This can be a great option for buyers who may not qualify for traditional bank financing, and it can also benefit sellers by potentially increasing the selling price or allowing for faster sale terms.
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 Florida 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.
Why Consider Seller Financing?
Offering seller financing, even if you have a mortgage, can be an appealing option for many homeowners in Florida. Here are a few reasons why seller financing might be a good choice:
- Higher Sale Price: Buyers who cannot qualify for traditional financing may be willing to pay a premium for the ability to work directly with you.
- Faster Sale: Seller financing can speed up the sale process by bypassing the lengthy approval process that comes with traditional bank financing.
- Steady Income Stream: You can create a steady income stream by collecting monthly payments from the buyer, which can be particularly attractive if you’re looking to maintain cash flow post-sale.
- Flexibility in Terms: As the seller, you have control over the terms of the financing agreement, including the down payment, interest rate, and repayment schedule.
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 (386) 383-2085.