Selling a home that still has a mortgage can seem complex, but with a clear understanding of the process, it can be straightforward. Here’s a step-by-step guide to help you navigate the sale while managing your existing mortgage.
Step 1 – Assess Your Mortgage Situation
- Contact Your Lender – Start by reaching out to your mortgage lender to inform them of your intention to sell. They can provide you with an indicative pay-out figure, which is the total amount needed to fully repay your loan.
- Review Your Loan Terms – Check if there are any penalties or fees associated with paying off your mortgage early.
Step 2 – Determine Your Home’s Value
- Get a Professional Appraisal – An appraisal will give you a realistic idea of your home’s market value. This helps in setting a competitive listing price.
- Engaging a Real Estate Agent – An experienced agent can provide a Comparative Market Analysis (CMA) and advise on the best-selling strategy. You will also generally engage an agent in the selling process.
Step 3 – Prepare Your Home for Sale
- Make Necessary Repairs – Address any issues that might affect the sale. Simple fixes like patching up walls, updating worn-out flooring, or upgrading broken windows and damaged doors can greatly enhance your home’s appeal and value. You may also be eligible for the HomeBuilder grant, which can help cover the costs of substantial renovations.
- Stage Your Home – Proper staging can make your home more attractive to potential buyers. Consider professional staging services if necessary.
Step 4 – List and Market Your Home
- Choose a Listing Price – Based on the appraisal and market conditions, set a price that is competitive yet realistic. The agent you engaged in step 2 can assist with this.
- Market Your Home – Utilize online listings, social media, and traditional methods to reach potential buyers. Again, the agent you engage in step 2 can assist with this.
Step 5 – Accept an Offer
- Review Offers Carefully – When you receive offers, consider not only the offer price but also the buyer’s financing and any other conditions. We strongly recommend that one of our experienced conveyancing solicitors assist in the review process.
- Negotiate Terms – Work with your agent to negotiate the best possible terms for your sale.
Step 6 – Settlement
- Pay Off the Mortgage – At settlement, the proceeds from the sale will first be used to pay off your mortgage. The lender will provide a final pay-out figure with the exact amount required.
- Receive Your Proceeds – After the mortgage is paid off and any other outstanding monies are paid (including rates, water, agents commission and solicitor legal fees), you’ll receive any remaining funds from the sale.
Selling a house with a mortgage involves careful planning and coordination, but by following these steps, you can make the process smoother and more efficient. If you require assistance with the sale of a property or have any further questions about selling a house with a mortgage, contact Preston Law today.