No matter how much is left in your mortgage, you can sell a home before it’s paid off, but it’s not always the best idea. Let’s learn more about selling your house before paying off the mortgage including when it’s a good or bad idea, questions that we’re normally asked, and how to get the most equity to your name.
Thousands of others are finding the life and home they’ve always wanted – why shouldn’t you be next?
Can I Sell My House Before Paying off the Mortgage?
Yes, you can sell your house before paying off your mortgage. Mortgages range anywhere from 10 to 30 years so most homes sold in the U.S. aren’t fully paid off. “Most of my sellers have a mortgage,” says Knoxville, TN agent Rebecca Carter. Don’t sweat if you only paid off half your mortgage or less, you can still get into a great new home.
When It’s a Bad Idea to Sell Your House Before It’s Paid Off
When selling your home, the name of the game is keeping balanced (or gaining) equity. If you’ve lived in your home for only a couple years ago and haven’t built up a lot of equity, it doesn’t make sense to purchase a home with a mortgage higher than what you owe on your previous mortgage. If you purchase a home for more than your current equity, you might accidentally turn your budget upside down.
A great real estate agent can keep you in line, so you don’t lose all the money you’ve already built.
How Soon Can You Sell a House You Just Bought?
Right away if you’d like. Many people buy homes to give them quick spruce-ups before turning them back over to the open market in as little as a few days. For people with large amounts of liquid cash or other equity, flipping a home is no big deal. Most homeowners don’t sell the home they just bought because it doesn’t make sense for their situation, but you can sell it whenever you’d like.
Securing a New Mortgage with a Current Mortgage
What if you’re out of the home and looking for a new one, but haven’t sold your previous home? It will be more difficult to secure a great mortgage, but it is possible. If you haven’t sold your home all that owed money is seen as debt by lenders. The more debt you have, the less likely you’ll get favorable terms. Ideally, you’ll get your previous home sold or under contract before applying for a new mortgage.
With the current state of Real Estate and the global pandemic, more and more homeowners are looking for a way to sell their home after they purchase a new one. At The Meissner Group, we have a solution that let’s homeowners do just that.
How it works…
1. We’ll get you a fully underwritten loan with down-payment assistance so you can make a competitive offer on your dream home.
2. Buy your dream home and move in. Only pay the mortgage on your new home; not your old home.
3. Get up to $25,000 to remodel or stage your old home so it sells for maximum value.
Close on your new home faster than the national average. Don’t struggle to accommodate strangers in your home or risk your health with showings. You’ll have 6-months to find the right buyer and get the best offer on your old home. You’ll sell for maximum value AND have a stronger offer on your new home without a contingency. Contact us to see if you qualify.
What Happens to Your Current Mortgage When You Sell Your Home?
When the final documents are signed the closing manager will open an escrow account as a temporary holding file for money and documents to make the sale official. On closing day, the buyer will send their first payment to the escrow account, your title company will make the final payment to your lender, and everything will be in order.
Do You Need to Tell Your Lender That You’re Selling Your Home?
Yes, you will need to tell your lender that you intend to sell the home, but not until you’ve accepted a legitimate offer on the property. It helps to let them know earlier in the process so they can look up your mortgage and give you an accurate number on how much mortgage is left to help shape your budget.
There’s not too much more you need to do with your lender during the selling process except be sure the person offering on your property is financially qualified to do so.
Selling Your Home with The Meissner Group
If your primary goal is balancing or keeping your equity you need to work with a team that can help secure the greatest price on your current home and a fair price on your next purchase. Castle Rock’s own, The Meissner Group, (TMG) has been helping Colorado residents sell and buy new homes while getting the most out of their dollars for several years and can do the same for you.
TMG is dedicated to finding the right buyer and the right next purchase no matter your mortgage situation or future goals. If you’re ready to use that equity you’ve built towards a great new home call TMG to talk buying and selling now. We’ll walk you through the process, get to know your unique needs and budget, and help you take advantage of a red-hot Denver market. Don’t wait for your equity to deflate, take advantage of the market by calling TMG today.