I want to sell a modest property to a family member for 40K as is (house needs a little work). I developed an agreement to have 16K as a down payment and $500/mo for 4 years - a deal between he and I. His wife wants him to go through an agency to draw up "official" mortgage papers. My mortgage company says there is nothing in my contract preventing me from entering into a rent to own agreement as long as the mortgage payments continue to come in on time ( I owe 13K). I am willing to do use the agent to draw up papers if my cousin wishes. Which way would you recommend? Thank You.

If you have a current mortgage, then you can't really hold your own. You could, but it would be complicated in filing secondary liens etc.

Your best bet is to do it as a Contract for Sale. You can get a promissory note form at most office supply stores and start from there to draw upan agreement thatyou will deed the property to them after the agreed upon payments are received.

If you sign that not and have it notarized that should make them feel secure.