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How To Refinance Your Land Contract Into A Mortgage. As a buyer, if you become able to qualify for a traditional mortgage, you may want to consider refinancing into one. Doing so could help you get a lower interest rate or avoid making a large balloon payment at the end of the land contract.

Most of the disadvantages of land contracts for buyers of property stem from the fact that the vendee (buyer) does not receive the deed to the property at closing. The vendee obtains equitable title, but the vendor (seller) retains legal title. This situation usually exists until the land contract is paid in full.

Generally, homeowners with land contracts may apply for either purchase mortgages from the FHA or for refinancing that creates an FHA mortgage. To qualify for FHA purchase or refinance mortgages with no money down, you'll need sufficient equity in your home.

The seller is responsible for the maintenance of the property, any repairs and for paying property taxes and insurance, the same as any landlord. The seller also gets to deduct those costs, as well as any mortgage interest, on his or her tax returns.

Common law remedies - damages A party who has breached a contract for the sale of land is liable to pay at least nominal damages, even if no loss has been caused.

If the buyer has not made all the payments and defaults on the land contract, the seller may be able to file a "land contract forfeiture" in court. Depending on the ruling, the seller may be able to keep all the money already paid to him as well as retaining the rights to the property.

On the flip side, a land contract is the sale of a property, where the seller finances the deal.In addition, there is no obligation to buy the property in a lease-to-own arrangement. As such, depending on the specifics of the agreement, the lessor can walk away if they are unsatisfied with the property.