Is it time to sell your home to something larger or smaller?
If you're ready to sell your current home, most likely you've got a current mortgage. So, what does that mean for you? How does it work to sell a home with a mortgage? Here are a few things to think about.
Find Out Your Current Mortgage Amount - contact your lender to get your final payoff amount. This is a little different than what appears on your statement because it will include accrued interest. When you sell your home, the loan amount and closing costs get paid off first. Then, you, the seller, get paid any additional amount from the home sale.
Know Your Equity - equity is the amount of money you'll earn on your current home at the time of the sale. If you're going to purchase a new home, you can use the equity in your current house to help fund your new house. Lots of people who are buying and selling a home at the same time figure the equity from their current property into the payment for their future house. You might even be able to get more house for the same monthly payment you currently have - it just depends on the numbers.
Contingency Sale - if you are buying and selling at the same time, it will typically be a contingent sale. This means, when you put an offer in on a home you want to purchase, you make a rule that says you need to sell your current home before you can move forward with your new home. While this is a less appealing offer than someone who puts in without contingency, it is a pretty typical type of offer. If you don't put a contingency on your offer, you might have to carry two loans at the same time - at least until your current home sells.
While this might sound daunting, your real estate agent and your lender can help you navigate the housing market with no problems! That's what they are there for. So, if you're ready to size up or size-down on your current home, contact us! We'd love to help you sell a home with a mortgage and find you the perfect new space for your family.