Heloc/Selling owner finance

3 Replies

Im getting ready to build a house. I have paid off the house I currently live in. I took a heloc out to build the new house. My friend wants to buy my house. I can do the financing, but don't know an avenue to protect us both ie(lease to own contract). So my question is, how should we draw up a contract or structure a lease to own with me still paying on heloc?

Originally posted by @Charles Bright :

Im getting ready to build a house. I have paid off the house I currently live in. I took a heloc out to build the new house. My friend wants to buy my house. I can do the financing, but don't know an avenue to protect us both ie(lease to own contract). So my question is, how should we draw up a contract or structure a lease to own with me still paying on heloc?

I probably wouldn't do it that way. You can't do a Lease Option in Texas longer than 6 months. My guess is that there is also a due on sale clause on the HELOC and the bank would get upset if they knew you sold the house before paying back the HELOC. Most HELOCs can be "closed" by the bank for just about any reason. Since you don't state a timeline, it's impossible to guess the best options.

Are you charging higher interest on the owner finance and you’ll cash flow on the spread? If you are, find an attorney or title company which specializes in wraps and see if you can do a wrap then use a 3rd party loan servicer or escrow company to service the loan. Otherwise, I wouldn’t do it. Good luck!

512-856-4289

yes i would charge 5% and im being charged 4.25%.

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