What Happens To My Mortgage When I Sell My Home

You?ve decided to make the plunge and sell you home. More than a few people have innocently asked me, ?What happens to my mortgage when I sell my home??

What Happens to My Mortgage When I sell My Home

If you own a home, you undoubtedly are carrying a mortgage on it. A mortgage is simply a loan from a bank or financial institution for percentage of the value of the home, which you pay to the person you purchased the home from when you bought it. Depend on the type of mortgage you have, the amount due on the loan should have decreased during the time you lived in the home and made monthly payments.

When you go to sell your home, the simple question is what happens to the then due balance on the mortgage? The simple answer is the financial institution is going to be paid out of the proceeds of the sale before you see anything. As a result, it is critical that you calculate in the loan repayment amount when determining if it makes sense to sell a home. If you have a home worth $300,000 and owe $280,000 on the mortgage, you are going to realize little or no profit after the costs associated with the sale and probably shouldn?t sell it.

If you have plenty of equity built up in the home, your mortgage can still end up costing you more than you originally expected. Many modern mortgages have restrictive penalties built into them. These penalties are designed to encourage you to hold onto the home for a set period of time, usually a couple of years, so the bank can recover a certain amount of interest up front. Put another way, the bank is trying to lock in a certain amount of profit on the loan.

When it comes to these restrictive penalties, lending institutions get pretty creative. Many will include a penalty if you sell or refinance the property within the first two years of the loan period. The penalties can be anything from the equivalent of three months of payments to a preset amount or even a percentage of the loan. State law often influences these issues, so you need to read your mortgage loan documents closely.

Regardless, you mortgage is going to be paid off as part of the sales process. The exact amount will depend upon the nature of your loan.

Posted by JanetBeury on December 13, 2008 at 12:00 AM

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JanetBeury is affliated with RE/MAX Innovations, which is located in Crofton, MD. For further assistance please use the contact information located on the right.

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Local Information for Crofton, MD

Latitude: 39.00886 -- Longitude: -76.680991

ZIP Codes for Crofton, Maryland	21114
Area Code for Crofton, Maryland	410
Time zone for Crofton, Maryland	EST

Other Area Cities: Crofton, MD Bowie, MD Annapolis, MD Severna Park, MD Pasadena, MD Glenn Dale, MD Easton, MD

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Crofton is a census-designated place and planned community in Anne Arundel County, Maryland, United States. Established in 1964, Crofton recently held its 40th birthday celebration. Community life frequently revolves around Crofton Parkway, actually a scenic loop 3.5 miles long, tangentially touching the larger "triangle" made up of three nearby roads, which encloses the original Crofton community. Crofton Parkway is the scene of yearly parades, two of its three elementary schools, the Town Hall, Village Green, community events, Crofton Country Club, and walkers, joggers and bikers around the loop. The Crofton area now extends North from the triangle, including Crofton Park and the Village at Waugh Chapel, a large outdoor shopping mall. Crofton also has a community pool, the Crofton Swim and Tennis Club [CSTC] but is restricted to those inhabitants of the triangle. -- Source: Wikipedia.com

Maryland 2000 Census Population Profile Map

	Crofton	Maryland	United States
Population	20,091	5,296,486	281,421,906
Median age	34.7	36	35.3
Median age for Male	34	34.9	34
Median age for Female	35.3	37	36.5
Households	7,404	1,980,859	105,480,101
Household population	19,926	5,162,430	273,643,273
Average household size	2.69	2.61	2.59
Families	5,476	1,359,318	71,787,347
Average family size	3.13	3.13	3.14
Housing units	7,573	2,145,283	115,904,641
Occupied units	7,404	1,980,859	105,480,101
Vacant units	169	164,424	10,424,540

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What Happens To My Mortgage When I Sell My Home

Local Information for Crofton, MD

Latitude: 39.00886 -- Longitude: -76.680991

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