Currently Have a Mortgage? The Need to Knows
Selling your home before you have paid off your current mortgage happens more often than you probably think. Mortgage loans have different terms some lasting for up to thirty years with few homeowners staying in their homes for that length of time. If you are currently in a mortgage loan and have several years left on your loan you can still sell your house if it is the right thing to do for you.
Before you put your home on the market it is a good idea to contact your mortgage lender to ask about your options and your current mortgage payoff amount. Once you know your outstanding loan balance this could help you to determine what you need to sell your home for in order to pay off the mortgage loan if that is the option you choose to do.
After talking with your mortgage lender, if you are still deciding to sell your home there are a variety of various you can deal with your current mortgage. Here is a list of the three most common ways to deal with your current mortgage when selling your home:
1. You can pay off your mortgage. If you are in an open mortgage this is one of the benefits to it. You have the ability to pay off the entire outstanding balance with no prepayment charges. If you are in closed mortgage the only difference is that some prepayment charges may occur. The amount of these charges is dependent upon the time remaining on the mortgage.
2. You might be able to take your mortgage with you. Depending on the institution you have your mortgage with you may be able to bring your existing mortgage with you to your new property. In order to do this you would have to increase your current loan amount and blend your existing interest rate with the current interest rate.
3. Buyer may be able to assume your existing mortgage. If you are buying a smaller property and still have several years remaining on your current mortgage this might be a good option for you to look further into. Especially if interest rates were a lot lower than they are currently in the market as this might attract buyers to want to take on your existing mortgage.
Regardless of how to you choose to deal with your current mortgage it is important to know all the possible options. Knowing the options you have will help you to make the right decision for you when it comes to selling your home with a current mortgage loan balance.