Seller Financing in NY

[Antonino McInnis]

Hello. I am looking to purchase a home in Bayville, NY. The home owner agreed to sell me the house for $600,000 via owner financing. The problem is that he owes $550,000 on his mortgage. How does this work? Any feedback is appreciated; thank you in advance.

[Shawn Ackerman]

@Antonino McInnis based on my experience, you can purchase the property on land contract.  However you will not receive the deed at closing considering the seller has an outstanding mortgage on the property.  What you can do is have an attorney draft up an agreement, have it recorded and refinance the property with a conventional lender in 6 months.  Considering there is a decent amount of equity in the property you will be able to cash his existing mortgage out on the refinance.  You may want to seek a solid credit partner if your income/credit is not very strong.  Title search a must and you will want to look at sellers credit report to learn if he/she has an judgement pending or have child support to pay.  Judgement will impact the transfer of a warranty deed upon refinance and official closing down the line.  Here is a decent read on the subject.  All the best to you on your journey.  http://www.rurallawcenter.org/docs/Buying%20a%20Home%20on%20a%20Land%20Contract.pdf