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Refinancing Out of a Land Contract
What do we need when refinancing our home that is currently on a land contract?
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1 Reply
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Homebuyers who buy a house under a land contract, or seller financing, have a limited time to get qualified and approved for a traditional mortgage loan. During the time they hold seller financing, the homeowner should prepare to get approved for a traditiional loan. Traditional loans are FHA, VA, USDA, Conventional, or non-QM loans. The people who purchase the home under land contract should work with an experience loan officer to get qualified for a traditional mortgage loan. When refinancing a home on a land contract, you’ll need to convert the land contract into a traditional mortgage. Key steps include:
- Title Search: Ensure the title is clear.
- Appraisal: Determine the current market value of the property.
- Proof of Payment History: Show consistent payments made under the land contract.
- Financial Documentation: Provide income, assets, and credit documentation as required by the lender.
Consult with a lender experienced in refinancing land contracts to guide you through the process. Normally, steps in getting prepared for a traditional mortgage loan should be not to be late with any payments, get three to five secured credit cards, get two credit rebuilder account, and see if a family member with great credit and low credit card balance can add them as authorized user. It should be no longer than a year to prepare a person eligible for a traditional loan as long as they have qualified verified income.
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