Seller financing and Home equity loan?
Is it possible for someone who has purchased a home via seller financing to get a home equity loan on that property?
Most Popular Reply
Seller financing that includes transfer of title to the buyer will use a recorded mortgage or a deed of trust. The equity lender will then discover the encumbrance on the title search.
If using an installment land contract or a rent-to-own (lease with option), then a memorandum to the benefit of the "buyer" is recorded on the property title to create a cloud, which is discovered by a title search by the equity lender.
Either way, the equity lender will know about the encumbrance before closing the loan.