A 30-year mortgage on a home sounds like this big scary thing but is it really? Most people think that you will be stuck with a loan for the rest of your life. Selling a house that has a mortgage, though, is definitely not impossible. Furthermore, you will be amazed by the number of mortgaged properties which are being sold.
In all fairness, this is not dangerous or in any way risky as long as the equity of the property is enough so that the debt can be repaid. While the procedure does have some strict rules, it is pretty simple. What happens is that as you sell your house, the proceeds from the sale are used for the mortgage to be repaid. First things first, you need to contact you lender which would typically be a bank and become aware of some finance-related stuff concerning your mortgage. For instance, you need to know your outstanding loan balance. It might change overtime depending on your monthly installments and on the regularity with which you pay your monthly fees.
There’s one more thing and it is called due-on-sale clause. This is a part of your mortgage contract which states that you are to repay your mortgage upon selling your property. Although it is something you have to comply with, it sort of goes without saying. There probably isn’t a buyer who will be very thrilled if they bought a mortgaged property.
You lender also will be highly interested to ensure that you do not owe them any money before somebody else takes possession of the property. The best part is that the lender will unlikely take part in the sale itself. When you are in the middle of selling a house that has a mortgage you still can decide who you are selling it to.
As long as the buyer is approved, their background is checked and they are allowed a mortgage loan, then the whole operation should go just fine. Keep in mind that your lender will likely make you also pay a fee to close your mortgage prematurely. This is also important as many sellers decide to hire an agent to do that for them.
It is all about the property title. Once you provide them with an account number, the real estate agent can finalize the payments on your mortgage and do the title transfer to the buyer. All of this is the ideal situation and it takes place when you property is worth more than the amount that you owe.
Selling a house that has a mortgage, however, might also be challenging and some special setbacks are to be expected. What you do not want happening is having negative equity. When you owe more money than the value of your home, then you have a problem. The proceeds from the sale won’t be enough for the debt to be repaid. Postponing the sale is your best option here otherwise you will be losing some money.