Is is legal for the owner of a house to offer a land contract to sell the house if the owner still has a mortgage on the house?

Hello m:

Sure. Title isn't transferred until the contract is fulfilled. When that happens, the seller should have clear title to transfer...

excon

This is at the discretion of the lien holder, the bank/lender holding the mortgage. Your name may be on the deed, but when you first buy a house, you really own maybe the first 2 steps, and are paying mostly interest for several years - and that's if it's a conventional loan.
Land contracts can be risky business, involving people with poor credit who move in and can't pay, and both buyers and sellers who don't follow safe guidelines.

Since a contract for sale doesn't trigger a change of ownership until the contract is up, most of the time the lender would not have a say. It depends on how the mortgage was written.

For the buyer you are at serious risk, since if the mortgage is not paid, and the loan defaults, the lender can do a foreclosure and the (contract for deed) buyer will just lose any and all money paid. *** they can of course sue the seller but if he has lost the home, most likely he has nothing to sue for.

This is happening more and more and more,