My question involves a mortgage in the state of: Michigan
MY wife and I are going into the fourth year of our land contract, with a balloon payment due in a little over a year, and we're trying to weigh our options. The contract was registered with the county. Basically, we stumbled into this house as we were starting our family (began as renters, converted to 5 year land contract) we know we don't want to live in the home long term because we want to move to the country. Also we've put SIGNIFICANT work into the house, but there are significant things that still need to be done (probably 20K in roofing and yard/landscape work.) Because of that, we aren't sure if it will be finance-able.
Bottom line, if we are not able to get financing, or discover that the balloon payment + the needed repairs will cost more than the house is worth, what happens if we just walk away at the end of our five year initial term without making the balloon payment? Does it simply revert back to the seller? Can the seller come after us and sue to get the money for the balloon payment? Is that kind of walking away equivalent to a foreclosure with all of the related consequences?
Thank you in advance for any insight.