Q: I'm currently in the process of selling my home and have one year remaining on my mortgage. What should I do next?
A: Congratulations on selling your house and nearing the end of your mortgage! That's a significant achievement.
When selling a property that still has an outstanding mortgage, there are several important steps and considerations to keep in mind. Here are the key points:
Notify your lender: Start by informing your lender about your decision to sell. They will provide essential information, including your mortgage payoff amount. This figure encompasses your principal balance, any accrued interest, and potential early payoff fees, which can apply if you're paying off the mortgage within the initial years.
Understanding the closing process: During closing, the buyer's payment is deposited into an escrow account. This escrow account is utilized to settle your mortgage and cover various closing costs (like realtor fees, attorney fees, and taxes). The leftover amount will be sent to you.
Releasing the lien: After your mortgage is paid off, your lender will remove the lien on your property. This means the legal claim will shift to the new buyer.
