How Do You Sell Your Home If You Have a Mortgage? - Image 1

How Do You Sell Your Home If You Have a Mortgage?

Posted on: 22/06/2021

Navigating the world of real estate is tricky business. There are so many different processes and professionals to go through when you are purchasing or selling a home. When you buy your home, you purchase it for a reason. Sometimes, that reason is just that you need a space to live and another reason may be that it is time for you to purchase what you currently consider your "dream home" or a home that is perfect for your current needs. But -- if you are simply purchasing a home out of current necessity, your current needs will eventually change. If you are taking the time to find a home that perfectly fits your current family size and lifestyle, you may need to eventually purchase another as your family size changes or you make certain adjustments to your lifestyle.

In this article, we will look at the following:

  1. How Common are Mortgages in the UK
  2. When is it Not Beneficial for You to Sell Your Mortgaged Home?
  3. What Happens to the Mortgage over Your Home when You Sell?
  4. What Does it Mean to Port Your Mortgage?
  5. I Want to Sell My Mortgaged Home. How do I do that?

1. How Common are Mortgages in the UK

Considering the fact that most mortgages last for on average twenty five years it is very likely that you will have to purchase a home, or a few homes, while still tied to a current mortgage. Indeed in 2020, there were 24.2 million dwellings in the UK and nearly 11 million mortgages.

Requesting a loan for a home, purchasing one, and then needing to purchase another while still tied to a loan and mortgage sounds complicated or counterintuitive. It's not, as most people have to purchase a home through some sort of loan and mortgage and then have to move and purchase another while still tied to that home. It's so common, that any lender you have requested a previous loan from, will understand the situation and have advice ready for you. They may give you a green light and tell you to move forward with your home purchase or they may advise you to wait as it may not be the best time to sell your mortgaged home.

2. When is it Not Beneficial for You to Sell Your Mortgaged Home?

There are a few reasons that selling your mortgage home at a certain time may not be ideal. If you need to sell your home out of necessity, you may be able to still complete this process, but speaking with a mortgage broker, estate agent or solicitor would be beneficial so you know the specific needs for your situation.

If the market has changed and the value of your home has been adjusted because of the changing tides, it may not be the perfect time to sell your mortgaged home. If the value of your home has decreased since you took out the loan and you decided to sell your home after some of the value was temporarily or permanently lost, you may have to pay the difference back to your mortgage company. In some situations, they may be able to assist you or make a deal, but very often, this situation is not an ideal time to sell your mortgaged home as you would have to pay back a large sum of money all at once.

If you have not lived in your home very long and have not moved past the lower rates of an introductory payment period, you may not be eligible to sell your home. If you do, you may be subject to a large fee until you move past the introduction payment rates.

If the situation regarding your mortgage has changed or you have not kept up with paying your mortgage, you may not be able to sell your mortgaged home right when you want to. If you have not kept up to date with your mortgage, your credit score has likely taken a hit. This can keep your current lender or future lenders from initiating business with you.

3. What Happens to the Mortgage over Your Home when You Sell?

If you can move forward with selling your mortgaged home and purchasing a new one, there is usually one of two different processes that you will follow through. In one situation, you may be able to pay off the balance of your current mortgage when selling the home. When this is done, you can typically move forward with starting a new mortgage with a new lender or the one that you have worked with previously. In other cases, you may be able to port your mortgage. If you port your mortgage, you can move it from one house to another without having to close the old one and begin a new one.

4. What Does it Mean to Port Your Mortgage?

Porting your mortgage is a transfer of a mortgage. This process can be used so that you do not have to go to the trouble of paying out your previous mortgage and beginning a new one. The ability to do this depends on your specific lender and often your standing with the lender.

Sometimes, when closing out a previous mortgage, borrowers may go to a new mortgage company to begin a new loan for the purchase of their next home. In order to avoid losing customers in the process of transferring from one loan to another, sometimes lenders will allow you to simply transfer the loan of your previous home to the new one. This is all based on your standing with the lender, your credit score, and whether this is even an option that your specific lender usually considers at all.

5. I Want to Sell My Mortgaged Home. How do I do that?

When you begin the process of selling your mortgaged home, it is best to consult with both your lender and mortgage broker. They can help guide you through the process and what will be best for your property. If you can port your loan to your next home, the process may seem complicated at first, but if you can complete the process this way, you will not have to go through the process of paying off your first loan and applying for a new one. If you were not happy with your current lender, you may be glad to be able to start fresh with a new one. But -- many people prefer to be able to roll over the loan and stay with their current lender if they are able to.

If you are attempting to pay off the difference of your loan, you will be able to choose whether you would like to continue business with your previous lender or if you would like to begin a new mortgage with a different lender. The choice is yours and a real estate broker or advisor can help you decide what the best option for you would be.

No matter what you choose -- port your mortgage or pay off the outstanding balance, you will likely prefer to sell your home as quickly as possible and finalize it with a quick sale. Many people prefer to do this as it allows them to move into the next phase of their life as soon as possible. Sometimes, the length that your home is on the market can affect how well it sells overall. Quick sales are beneficial for many reasons.

If you are looking for a fast sale, a cash property buyer can help you move through the process faster than other options. Quick Property Buyer will view your home and give you a top-notch quote and offer. We know that many people need and want to sell their homes as quickly as possible and we can assist with that. If you are navigating the process of how to sell if you have a mortgage, a quick sale with Quick Property Buyer is one way to take that large task of selling your home off of your to-do list.




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