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What Happens to Your Mortgage Loan When You Sell a House?
Selling a house is not the easiest process. It involves making repairs, finding a reliable realtor, filling out and signing papers, and other things. This process can be even more difficult if there is still a mortgage on the property that needs to be paid. But not to worry, selling a property with a mortgage is an everyday practice. Most homeowners do not stay in their homes before the loan is completely paid off. Instead, they decide to sell their current residence and move to a new house. If this describes your situation and you are preparing your home for sale, you may be wondering what will happen with your mortgage when the property is sold. In this article, We Buy Waco Houses will explain exactly what happens.
What Will Happen to a Mortgage in a Typical Sale
If you are selling your home the traditional way, you should be able to sell your home for more than you owe on the mortgage. If you have been paying your mortgage for a long time, you will have equity that you can cash in once the house is sold. The amount you will get from selling your property should be enough to pay off the remaining mortgage, and you can use the rest of the money for the down payment on a new house. If the real estate market has remained stable in the area you live in and you have been taking care of your home, then your chances of selling the house, paying off the mortgage, and getting approved for a new mortgage are pretty high.
This is the typical situation, but it can be more complex if you cannot pay off the mortgage completely.
What If Paying Off the Mortgage Is Not Possible?
If the value of your property is not enough to cover the remaining mortgage, you owe more than the house is worth. In other words, you can say that you are “underwater” on the mortgage. It is also sometimes called an upside-down sale. In most cases, a traditional sale is not an option. However, there are other solutions.
Short Sale
A short sale, also known as a preforeclosure sale, is the type of sale when you sell your property for less than the amount owed on your mortgage. It means that a seller is “short” the money needed to pay off the mortgage. To be eligible for a short sale, you need to write a letter of hardship to a mortgage lender, with an explanation of why the mortgage cannot be paid off. Supportive documentation is also required, including pay stubs and tax returns.
Selling a Property to a Real Estate Investor
The quickest and most efficient way of solving your mortgage problem is selling it to a real estate investor or cash buyer. Many sellers also prefer this method because it’s fast. You can close on the sale of your home and receive the money within a few days. Real estate investors are ready to buy houses immediately — in any condition and location.
We Buy Waco Houses is a real estate investment company operating in the Waco community. Our passion is to make our city and community better. With us, the home-sale process is easy and straightforward. First, you need to give us a call, and we will schedule a quick walkthrough of your property. After we evaluate your house, you will receive a cash offer, which you can either accept or reject. If you accept it, you will receive cash within a few days. Do not hesitate to call us at 254-272-3743 or fill out our online form for more information.
