Q: Can we apply rental payments to our mortgage payments and then transfer ownership to tenant?
My husband and I own a house that we are renting out. Our tenant would like to buy the house but may not be able to secure a loan immediately. Is it legal to enter into an agreement with him that his rental payments will go towards paying off the mortgage? We would like to get it paid off in five years so it possible to have him pay extra on the rent to pay extra on our mortgage so it is paid off quicker. We also would like to know if we can even charge additional which would go towards our profit. So basically, if we told him we were selling the house to him for $80,000 and we still owe $75,000, can we up the payment toward the house and then charge him extra each month for our profit? After five years the house would be paid off and be his. Would we be able to somehow transfer the title and deed to him at that point? I know we cannot enter into a land contract or have him assume the mortgage so, without him actually buying it outright right now, we are looking at alternativ
A: That type of purchase is permitted and is called a land installment purchase agreement. There are several provisions that are required to be in the agreement by Ohio law, it must be signed by both seller/landlord and buyer/tenant, and their signatures notarized, and then it must be recorded in the county recorder's real estate records. Use the Find a Lawyer tab to retain a local real estate attorney to prepare the agreement so that it complies with Ohio law and will be enforceable.
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