What Happens to My Mortgage When I Sell My Home?

What happens to my mortgage when I sell my home is a good question. If you've decided to sell your home, then you definitely want to know about the money that's been your responsibility for so long. While you have carried a mortgage since you had your home, now you want to know how selling affects you. This is normal, and has an answer.

For those who have never owned a home, a mortgage is the loan that is taken out against the value of the home. This amount is paid to the homeowner when purchasing. If done correctly, the amount of the note will decrease after you have lived in the home for a certain period of time.

If you're selling a home and wonder where the balance goes that's owed on the property, it's very simple. Whatever financial institution you use will get their money from the proceeds of the sale. This will happen before you realize any profit. It's absolutely critical that you calculate the amount of the existing loan into the selling price. Be sure you enough to sell after getting your asking price, without still owing on the loan.

Even if you have tons of equity built up in your home, your mortgage can still rob you of your profits on the sale. You can end up paying more than what you thought in the beginning. Today's financial world has mortgages that have substantial penalties built into them for the purpose of the lending institutions not getting the shaft. They do it very well. They're put into place to encourage keeping the home for at least a certain amount of time. They lock you in.

These lending institutions have excellent lawyers at their disposal, and they put these penalties into place with a great amount of creativity. There are penalties if you decide to sell within a certain amount of time, or if it falls withing the first two years of the mortgage loan, and it goes on.

They can be a pre-set amount or for a certain amount of payments. It will be disclosed in the fine print of the mortgage. Since these issues are often influenced by state law, you need to read your mortgage documents thoroughly.

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