Is Selling a House That Has a Mortgage Impossible?
Today’s real estate and economic system has really made it easier for people to trade, sell and buy. That’s because we all love money and people and institutions alike are all aiming at always registering a profit. Restrictions which took place in the past are no more and this even goes for selling a house that has a mortgage.
They say you have no equity in your home when it is mortgaged because of all the money that you owe. This isn’t entirely accurate because you still have the power to do whatever you see fit with your property. Australian regulations allow you to sell a house that has a mortgage and at the same time pay off your loan with the proceeds from the sale.
Your only main goal is to sell your house for more money than you owe. In this case nobody will suffer any losses. The bank will have their money back, you will have sold your property and the buyer would have a brand new home.
In all fairness, this transaction is not very hard and you have only a few things to consider before you start looking for a buyer. It is best if you contact your lender first. Check if you have a due-on-sale clause in your mortgage contract. What this means is that basically you are required to immediately pay off your debt upon selling the property.
It can be quite the negative clause to have in case your property is worth less than what you owe the lender. But if the money from the sale is enough for you to repay your debt then you got nothing to worry about.
Additionally, when selling a house that has as mortgage you will need someone to help you determine the price. Again, speaking with your lender first will likely be the right thing to do. Depending on how much money you owe, you can decide whether to sell now or postpone the sale and wait for a better time.
You shouldn’t be in this alone. Hire a real estate agent and allow them to help you with all the procedures. You do not have to be the one to deal with both buyers and lenders at the same time. Your representatives will be able to handle all the discharge papers and title of the property.
The best part is the final one. When it is all set and done, the bank of your buyer will automatically wire the money to your bank so that your loan can be repaid. The remainder of the cash is for you. There are, of course, fees to think about. You will likely owe a fee to your lender for concluding the mortgage early and your real estate agent will charge you 3% of the sale price. Most folks will tell you, however, that all of this is completely worth it.