Q: Question about owner financing
I currently owe 150k on my house. I have an interested buyer at 500k. At closing the buyer will put down 150k to pay off existing mortgage and I will carry the loan of 350k@4% for 30 years. My question is if for some reason the buyer at some point gets a second mortgage/equity loan from a separate party and defaults on the original loan would that stop me from from foreclosing on the house? Would the second mortgage/equity loan company have claim to the house? Can I forbid separate loans in the owner financing contract?
A:
The answers to those questions will depend on what's in the written agreement between you and the interested buyer.
Contact an attorney directly to assist drafting or reviewing any lending agreement that exchanges $350,000.00 of value. You have valid concerns which should be addressed in the lending agreement you'll sign. The attorney who drafts that agreement will be in the best position to answer your questions and address your concerns.
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