Can I Sell a House with a Mortgage?

June 20, 2024

40
Yes, you can sell a house with a mortgage. Selling a mortgaged property is a common practice and can be done smoothly with proper planning and understanding of the process. Here’s a detailed guide on how it works:

Understanding the Process

Outstanding Mortgage Balance

Before you list your property for sale, you need to know your outstanding mortgage balance. This can be obtained by contacting your mortgage lender for a redemption statement, which details the remaining balance, any early repayment charges, and other associated fees.

Property Valuation

Arrange for a property valuation to determine the current market value of your home. This will help you set a realistic asking price and understand if the sale proceeds will cover the outstanding mortgage balance and any additional costs.

Instructing an Estate Agent

You may choose to sell your property through an estate agent. An agent can help market your property, arrange viewings, and negotiate offers on your behalf.

Receiving Offers and Accepting One

Once you receive offers, you can negotiate and accept the one that best meets your expectations. Make sure the offer is sufficient to pay off your mortgage and cover selling expenses.

Conveyancing Process

Engage a solicitor or licensed conveyancer to handle the legal aspects of the sale. They will manage the transfer of ownership, liaise with the buyer’s solicitor, and ensure all legal requirements are met.

Settling the Mortgage

Redemption Statement

Provide your solicitor with the redemption statement from your lender. This will outline the exact amount needed to pay off your mortgage.

Completion Day

On the day of completion, the buyer’s funds will be transferred to your solicitor. Your solicitor will then pay off your mortgage using these funds, along with any early repayment charges if applicable.

Discharging the Mortgage

Once the mortgage is paid off, your lender will discharge the mortgage from the property, removing their charge from the title deeds.

Receiving Remaining Funds

After settling the mortgage and any other costs, any remaining proceeds from the sale will be transferred to your account by your solicitor.

Early Repayment Charges

If you are within a fixed-rate period or a special deal, you may incur early repayment charges (ERCs) when selling your property. These charges can be significant, so it’s important to review your mortgage terms and factor in any potential ERCs when planning your sale.

Porting Your Mortgage

Some lenders offer the option to “port” your existing mortgage to a new property. This means you can transfer your current mortgage deal to your new home, avoiding early repayment charges and maintaining your existing terms. Check with your lender to see if porting is an option for you.

Conclusion

Selling a house with a mortgage is a straightforward process, but it requires careful planning and coordination with your lender and legal representatives. By understanding the steps involved and seeking professional advice, you can ensure a smooth transaction and successfully sell your property.

Answered by:

Natalia Barry

Mortgage and Protection Adviser

Last Updated:

20.06.2024

Answered by:

Natalia Barry

Mortgage and Protection Adviser

Last Updated:

20.06.2024

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