“Ask Your Attorney” Column
About Selling Your Home On A Land Contract
Dear Counselor: I found a buyer for my home, but he can=t get a mortgage under his current economic circumstances. He=d like me to sell my house to him on a land contract, and said that I could take part of the monthly payment and use it to pay my own monthly mortgage until he can pay off in full. Is this a good idea?
Dear Client: Land contracts have been in use for many years. Usually, the buyer pays the seller monthly installments of interest and principal, just like you make your monthly mortgage payment to the bank. However, even though this Asounds [email protected] it may be a disaster waiting to happen to you as seller. The language of the mortgage on your home likely prohibits selling any type of interest in your property, including using a land contract, without getting the lender’s consent ahead of time. If you disregard that provision of your mortgage, the lender can “call” your loan, and demand that you pay it off all at once. So, before you go ahead and do anything, check your documents — and ask your lawyer!
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