We did owner financing with my aunt and uncle, through a lawyer, filed with court. We pay the taxes. We are wanting to sell, we owe $44,000. We would take the $44,000 off the top of the sale, pay them completely off then take the left over money and purchase a home. Is this legal, or do we need to go take out a loan, pay them 44,000 then sell?
The fact that your loan is owner financing won’t likely make it any different than a conventional mortgage, in terms of selling and the payoff. This means that you should be able to sell the home and pay the balance of the owner-financed loan at the closing. If you have equity remaining, you could then use that to pay toward your new home. In the event where you find the new home before selling the existing, owner-financed home, you can place a contingency on the offer of the new home that you first sell your existing home before buying the new one.
I hope that helps!