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Can I Do Owner Financing In TX If I Have A Mortgage On My Property?

Signing for home in Houston TX

Like many adults, you are a homeowner and you are looking to sell your home after about 7 years which is the average most people keep their homes for.

However, you have a bit of a problem, you haven’t fully paid for your home. It’s not uncommon to find yourself asking this question, can I do owner financing in Houston if I have a mortgage on my property.

Your not alone, many homeowners ask this question when seeking to sell their homes in an unconventional way.

It’s a great option but what you need is the information to know if selling your home with an existing mortgage is possible or even legal.

Well you have come to the right place. This article will answer your question and give you some strategies that you can implement today.

You have other options

If you are a homeowner who is thinking about selling your house you have several options.

They can list their home through an agent, or they can list it themselves, or they can sell directly to a buyer.

Many homeowners are implementing a simple strategy called “owner financing” or “seller financing” that allows them to sell their home to a buyer and collect regular payments for the remainder of the loan amount.

Here are the key points to owner financing:

  1. The buyer pays a down payment
  2. The buyer pays regular monthly payments
  3. When the agreed-upon price is paid, the title reverts to the buyer

Homeowners love it because it’s a great way to sell and a great way to find even more buyers – including those who might not be able to get traditional bank financing.

Homebuyers love it because it means more choices for them and they don’t have to necessarily impact their credit score to get a house.

If you own your house outright, you can do a seller financing agreement. But what happens if you have a mortgage? Maybe you’re wondering, “Can I do owner financing in TX if I have a mortgage on the property?

The short answer is: it depends on your state laws and your loan provider.

Seller financing with a mortgage in place

In some states, you can create something called a “wraparound mortgage” in which you extend a mortgage to a buyer (usually at a higher rate of interest) while still paying your own mortgage to the bank.

However, this is not legal in all states and all situations, and there are additional clauses that you should be aware of.

Can I Do Owner Financing if I Have a Mortgage on the Property? – You have choices

If you’re unable to sell with seller financing because of a mortgage, you have other options that are available to you.

An alternative that can work great for you is rent-to-own, which has some similarities (such as ongoing payments and you continue to own the home) and some differences (there might not be a down-payment and the buyer needs to qualify for a mortgage from a bank at the end of the pre-established rental term).

Although there are some key differences between the two, rent-to-own can be a great option to create passive monthly income.

If you are thinking about accepting owner financing but you still have a mortgage on your property, here’s another option for you:

Get in touch with us and talk to us about your property. As experts in buying and selling real estate, we are aware of a number of options that you might not know about.

We can walk you through those options and help you or we can connect you with someone who can help you.

Regardless we will help try to help you with your situation .


If you are thinking of selling your home and your in a market that is tough and you need more options than just selling with a realtor.

Consider these 3 options: selling directly to a cash home buyer, rent-to-own or owner financing.


Get in touch with us today by clicking here to fill out the form or by calling us at 832-535-2034.

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