I have a tenant who is very interested on buying our house but cannot qualify for a loan due to debt ration and maybe low fico score.
We have a mortgage on the house and their rent covers the payment. I would like to sell it but having a hard time finding a qualified buyer and this tenant has be renting from me for over two years and has a very good rental history.
Is there such thing as owner financing even though I still have mortgage on it, so that they can take over the tax and insurance and all the repair cost, and once their credit get better, we will refinanced it to their name completely and if so what kind of contract do I need to draw up?

Thanks,
arosemond

Not a true mortgage, since in a real sale and owner finace, you deed the property to them, with you as the mortgage holder, so your loan will have to be paid off.

You can do a lease with purchase option, or do a stright, contract for deed
*** if those are allowed in your states, someone posted before they are not allowed everywhere.

But to be honest, there is a reason he can't get the loan, and that same reason is that he does not make enough money and is a bad risk.
I just had to take a home back today, and it was not a pretty sight, they had refused to leave and get their property out, we were carrying kids clothes, tows, and boxes and boxes of junk out all day.
Now it is clean up crew, with drywall work and paint all day tomorrorow.

But on the other hand, I all ready have the new buyer waiting to move in,

Quote:

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Originally Posted by arosemond

I have a tenant who is very interested on buying our house but cannot qualify for a loan due to debt ration and maybe low fico score.
We have a mortgage on the house and their rent covers the payment. I would like to sell it but having a hard time finding a qualified buyer and this tenant has be renting from me for over two years and has a very good rental history.
Is there such thing as owner financing even though I still have mortgage on it, so that they can take over the tax and insurance and all the repair cost, and once their credit get better, we will refinanced it to their name completly and if so what kind of contract do I need to draw up?

Thanks,
arosemond

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Why not leave them as tenants and raise the rent to cover the taxes,insurance and repairs? Do you think they can afford to do that? If not, then they will not be able to afford it if it is in their name either and you will loose the leverage you currently have. If a bank or mortgage company does not have faith in their ability to pay the money back, why do you? Unless you are experienced in lease options or land contracts this may not be the direction you should be going. If you do decide to owner finance find a real estate attorney to help you. Once the tenants improve their score you will be an excellent reference as to their ability to pay the house payment. Until then, they may be better off being tenants.