When a property is sold, the title is transferred from buyer to sell. If there is a mortgage on the property, then the proceeds from the sale must clear the mortgage or it will appear on the buyers title. So yes it’s possible to sell your house with a mortgage on it, but there are a couple of things that need to be done in advance, You must first let your solicitor know, so that they may take up the title deed with your lender. This is ordinarily done prior to listing the property as it can be time consuming.
Thinking of selling but have a mortgage on your home? We’ve got good news, you can sell your house even if you still have a mortgage, but there is some work to be done in advance.
Here’s what you need to know about selling your house with a mortgage.…………
Review Your Contract
First things first, take a look at your mortgage contract. You’re going to be looking for stipulations in the terms of the contract that specify selling your house without having repaid the loan in full. The clause you will more than likely be looking for is a due-on-sale clause. This clause is put into place to protect the mortgage provider. It usually states that upon sale of the house you will repay the lender in full.
There are, on occasion , exit charges also. These exit charges can in some instances make a sale uneconomical as you will owe the lender more than what can be generated by selling the property,
If you are unsure of any terminology in the contract , or if you are unable to calculate what would be left from the sale of the property, you should consult with your solicitor.
Check Your Balance
Once you’ve established that the clause is in place, you will need to contact your lender to check the balance of your loan. Note that this balance remains valid within a certain timeframe, and may be subject to change. Double check this with your lender.
Get A Valuation
Once you know what the balance on your mortgage is, you’ll need to get a valuation. Inform your estate agent of the situation, and inform them of the balance. This will give you and them an idea of the right selling price for your property.
There are some major highstreet estate agents who will offer a comprehensive free valuation such as Leonard Wilson Keenan.
Get Your Paperwork In Order
You will have to contact your lender to release the deed to your house. As this can take a while, it’s best to put in a request as soon as possible. This can usually be handled by your solicitor.
To surmise, it is possible to sell your house with a mortgage. Whilst it’s not as straightforward as selling a mortgage-free property it can be done, preparation is key.
If you’re thinking of selling your property, contact LWK for more information. Our team of dedicated real estate agents will be happy to help!
Prepare your property for sale
As in all property sales you will want maximum interest for viewings, so that you can acquire the closest purchase price to what the property has been valued at. To do this, you need to attract potential buyers. The first things these buyers will see is more than likely photographs of the property on various websites or social media, or a ‘For Sale’ sign planted in the front garden might grab their attention. Either way, you want to make sure their first impression is a positive one. How do you achieve this? Check out our tips on preparing your property for sale.
Ensure your home’s curb appeal by taking the time to tidy the front garden and driveway. Things like a gentle pressure wash and a good sweep can make your home all that more attractive to any potential buyers.
When it comes to the interior of your home make sure that mess is kept to a minimum. Everyday clutter can build up, so a quick tidy before photos are taken and any viewings take place is essential. Another tip is to remove any items that are overly sentimental. This includes things such as family photos, and hall hangings etc. Potential buyers will want to envision themselves in the space, this is made easier if they aren’t competing with your own belongings.
Distribution of funds
If you’re thinking of selling your house with a mortgage still on the property, and you wish to repay the remainder of the mortgage with any funds raised from the sale of your property, there are a few things to consider.
- Are you on a fixed rate or a variable rate mortgage?
If you are on a variable rate, there is absolutely nothing to stop you paying off the loan in full whenever it suits you. Your bank cannot refuse to allow you to do so, even though it would clearly benefit in terms of additional interest from you remaining on your agreed payment schedule.
Even on a fixed rate, you retain the right to pay off the loan in full or pay off a lump sum to reduce it, although the bank will impose a penalty to reflect the lost revenue to it during the remainder of the fixed term. This penalty will usually be outlined in your loan offer.
If you are unsure of the above, contact your bank directly as procedure can vary depending on the financial institution.
- How do I find out what’s left on your mortgage?
You can ask your bank for a redemption statement or final settlement letter.This will formally set down your outstanding mortgage balance along with any interest due that has not yet been deducted. It will also let you know what the daily rate of interest is on the loan so that you can calculate anything extra you will need to pay between the balance indicated on the day the letter is sent and the time you actually pay off the loan.
- What happens when the mortgage has been paid?
Once the mortgage has been paid off, the lender should automatically let you have any paperwork relating to title of the property
There are two parallel systems in place to confirm legal ownership of a property: Land Registry and Registry of Deeds. Your solicitor should be aware which one applies to your property. Deeds are the older, paper-based record while Land Registry is a State guarantee proof of ownership on a property, with all the details — including mortgage charges — entered on a folio in the registry.
You’ve sold your house, now what are the next steps involved? Your solicitor will agree to a final closing date with the buyer’s solicitor. This is the day you will hand over title deeds and keys and the balance of the sale price is sent to your solicitor.
If you have a mortgage, your solicitor is obliged to pay it off from the sale proceeds and any balance is transferred to your account after your solicitor has deducted all the agreed fees relating to the sale.
Sell my Property Dublin
If you’re considering selling your home with a mortgage in place, and are wondering what options are available to you, contact LWK today and we can advise you on how best to move forward. No commitment necessary. We are always happy to help in any possible way we can.
