Can I Sell a House While in Mortgage?
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Selling your property while still in mortgage is actually fairly common. Being in mortgage just means that you still owe money to your lender and have yet to satisfy the home loan. Typical mortgages span for a period of 15 to 30 years and homeowners often sell their homes prior to paying this in full.
Determine the Mortgage Payoff
The first step in selling a house while in mortgage is to acquire the services of a real estate listing agent to determine what the current payoff for the mortgage is. This will allow you and your agent to determine what your current borrowing situation is and how much the home needs to sell for to cover the private home loan in Caledon you have. In most cases, the mortgage lender will provide a payoff quote that is good for a certain amount of time.
The Easy Method
The simplest method is to sell the home for enough money to pay off the balance that is owed. When this occurs, the agent you hire will work with the real estate lawyer and title company to prepare the settlement statement and loan closing documents. When the house is closed on by the buyer, their funds are used to pay the balance on the mortgage, as well as any fees that are owed. The rest is sent to you, the seller.
Have a Short Sale
An option that is not as ideal is if your home is not worth what you currently owe on your mortgage. If this housing market is poor, this can occur. If you absolutely have to sell the house, then you can go to the bank and try to arrange the short sale. This can happen if the mortgage lender agrees to accept a reduced payoff amount to help you sell the property.
If you want to stay in the home, then you may be able to choose a second mortgage in Caledon. However, this option is not available for everyone. Another option is an assumed mortgage. While this is rare, it can happen from time to time. This is when you sell with a mortgage. There are some lenders that will allow the buyer to take over existing private home loans.
A common issue for some is having to move prior to selling the home. Acquiring another mortgage for a new home can be a huge financial challenge. Some lenders allow DTI(debt to income) ratios of 50 to 55 to do this if they have good credit and income. Renting the home or a bridge loan are other options to consider when trying to sell a home while in mortgage.
Selling the home while in mortgage does not have to be difficult, but understanding the options is essential. If the home is sold and a person does not have the best credit to purchase another home, then they may be eligible for a bad credit mortgage in Caledon.