Full question:
My parents got our home loan and lived with us for a couple years until they built a smaller home on the same property. Due to my husbands previous marriage and his x wife's failure to get a home in Vegas out of his name, we cannot qualify for the loan. The loan is in my dad's name but we need to somehow get the home in our name for tax purposes and to protect him. Can he owner finance for us even when there is a loan in his name?
- Category: Real Property
- Subcategory: Sales
- Date:
- State: Missouri
Answer:
We suggest contacting the lender to find out whether there is a due on sale clause, and if so, whether they will consent to the transfer without accelerating the loan. If there is a mortgage on the property, the contract may violate a due-on-sale clause in the mortgage which the lender may or may not seek to enforce.
Most lenders require that the mortgage or deed of trust contain a due on sale clause. This is an acceleration clause in a loan, calling for payment of the entire principal balance in full, triggered by the transfer or sale of a property. Such a clause permits a secured mortgage lender (federal, state or private) to call the entire unpaid loan balance due and payable immediately if the property securing the loan is sold, transferred, traded, gifted or otherwise disposed of without the lender’s prior written consent.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
