In case you’re wondering if homeowners sell their houses before paying off their mortgages? It will surprise you to know that most people sell their houses before their mortgage runs out. Most mortgage terms last for 30 years and not too many people stay in their houses for that long.
However, there are some things you must consider when planning to sell your house before paying off your mortgage. You must ensure to get a buyer fast, like a cash house buyer. At Best Offer OKC, we buy houses from OKC people who are looking to get a quick sale or trying to avoid the hassles that come with selling traditionally.
Steps to selling your house before the mortgage is paid off
Before selling your mortgage, these are the steps you must take:
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Contact your lender
First, you demand your current mortgage payoff from your mortgage lender before you proceed to sell your house. The amount you receive is valid for 10-30 days before it adds more interest. You should also check your loan documents to know if there’s a prepayment penalty as that will determine how much profit you keep after selling your home. A prepayment penalty is a fee you have to pay if you sell your house before paying off your mortgage loan. It can be calculated in different ways depending on the lender. It could be a percentage of your mortgage balance (maybe 2-5 percent).
However, your mortgage lender cannot determine who you sell to or not, but they have the right to ask for a buyer’s pre-approval or proof of funds.
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Set a sale price
You can hire a seasoned real estate agent to help you set a reasonable price for your home. You have to sell your home at a price that can clear off your mortgage payoff, closing cost, agent commission, taxes, and other fees involved in selling your home. When you close the deal on your house, you can take whatever is left of the profit and use it to make a new investment or probably buy a new home.
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Get an estimated settlement statement
Before you decide to sell your house before paying off your mortgage, ensure selling the house is worth it. Remember, you’ll be using the profit made from the sale to clear off your mortgage debt, commission costs, and other costs involved in selling a home. When you hire a realtor, the first thing they’ll finish is to create an escrow account. Once this account is created, your escrow agent can provide an estimate of the closing cost. Though the estimate may not be accurate, it will help you determine how much money you’ll be able to make from the sale of your home.
Conclusion
There are different approaches to selling your home before paying off your mortgage. You can choose to sell through a traditional real estate agent or you can sell to a cash house buyer. A cash house buyer can buy your home at a price that can cover your mortgage and other costs. The best part is you don’t have to pay a realtor’s fee or make renovations when selling to a cash house buyer.
At Best Offer OKC, we buy houses in Oklahoma City at the best price. With our services, we can close the sale of your house within a short time. Contact us today to learn more about our services.