Can the bank force us to pay the loan balance if we sign a rent to own contract.?
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Can the bank force us to pay the loan balance if we sign a rent to own contract.?
I was told if we sign a rent to own contract the current owner still owes 100,000 that if the bank found out they could make us pay the full balance.
Asked on May 2, 2018 under Real Estate Law, Indiana
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
The current owner cannot eliminate or cut off the bank's right to be paid all amounts due to them, or to foreclose if not paid--the mortgage or other loan "overrides" any later contract to sell; and the property may not be lawfully transferred without paying off any mortgage or HELOC, etc. on the property. So if there is a balance due on the property, either the current owner or you would have to pay it; if not, the bank could take the property.
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