It is possible to refinance your home if you are currently in a land contract. There are many factors involved. You should typically have one year of vesting in the home, one year worth of payments made to land contract holder, preferably cancelled checks and verification of the land contract having been recorded. (Although some lenders will take unrecorded land contracts).

If you are looking to build on the land the construction lender will typically pay off your current note with the very first draw that is made.

With a land contract the seller does not usually relinquish full title until the borrower has completely paid off the loan in full. The buyer will normally make monthly payments to the seller until they have paid the loan off in full, usually by refinancing the mortgage. The buyer should keep a copy of all canceled checks for monthly mortgage payments as long as they have the land contract so that when it is time to refinance the mortgage they have proof of on time payments.

These type of transactions offer an alternative to entering into a lease with option to buy. The land contract will act as a privately held mortgage and your monthly payments will help reduce your overall loan amount.

 

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