Its possible to keep the same mortgage. Its called porting. That doesn't happen often. Usually, the mortgage is discharged using the sale proceeds and you receive the remainder of the cash, then get a new mortgage. You can use all or some of your proceeds as the new downpayment.
But to answer your question, when you sell the home the full balance of your loan comes due. You pay the loan off with the proceeds from the sale. A title company sorts it all out and makes sure the money goes to the right accounts at closing.
No, in the US you cannot transfer a mortgage from one property to another. You have to get a new mortgage.
In summary, it is essential to notify your mortgage company when selling your home to ensure a seamless transaction and proper settlement of your loan. Your real estate agent and closing attorney can also help coordinate communication with your lender to facilitate a smooth home-selling experience.
When you close on the sale, you'll use the proceeds to pay off your mortgage lender and any outstanding fees or closing costs. A representative of the lender will be at the closing to collect the money due to them. Whatever is left after that is your profit — that's the money you get to keep, aka the net proceeds.
A transfer of mortgage lets a buyer take over the current homeowner's mortgage, assuming the same terms and conditions as they take over responsibility for payments. If your mortgage allows it, this strategy can help you avoid foreclosure, but it can have advantages for the new mortgage owner as well.
You'll typically only be able to transfer your mortgage if your mortgage is assumable, and most conventional loans aren't. Some exceptions, such as the death of a borrower, may allow for the assumption of a conventional loan.
Your mortgage doesn't just disappear when you pass away. If you've bequeathed your home to a beneficiary, they'll inherit the balance on your home loan as well as the property itself. If the lender doesn't receive prompt payment, it can impact your credit score or even lead to foreclosure.
After you pay off any mortgages or liens on the house and pay the government for any capital gains or other taxes and pay off your realtors and lawyers (if any), you can do what you like with the remaining funds.
If you want to take out a mortgage on a paid-off home, you can do so with a cash-out refinance. This option allows you to refinance the same way you would if you had a mortgage. When refinancing a paid-off home, you'll decide how much you want to borrow, up to the loan limit your lender allows.
Consider The Five-Year Rule of Real Estate
By allowing time for property values to appreciate and mortgage balances to decrease through regular payments, homeowners can accumulate substantial equity over five years, providing a cushion to offset the various expenses associated with selling and moving.
If you owned and lived in the home for a total of two of the five years before the sale, then up to $250,000 of profit is tax-free (or up to $500,000 if you are married and file a joint return). If your profit exceeds the $250,000 or $500,000 limit, the excess is typically reported as a capital gain on Schedule D.
As a homeowner, you typically cannot prevent your mortgage from being sold or transferred. The lender has the legal right to sell the mortgage to another entity, lender or investor, under federal law and under the terms of your loan contract (read the fine print).
Porting a mortgage means you transfer the deal you've got on your old home to the new place you're buying. The majority of mortgages, though not all of them, can be ported to another home. There can be restrictions on the number of times you can port a mortgage. Porting will not always be the best deal for you.
Porting allows you to keep your existing mortgage, including the rate and terms, and transfer it to a new property without the penalty you would need to pay if you break your existing mortgage.
You can switch mortgage companies without refinancing only before the home purchase closes. After that, you can change to a different lender through a refinancing.
Here's the simple answer: Yes, you can sell a house with a mortgage. In fact, it's fairly common to do so.
A family member (or sometimes even non-relatives) can assume an existing mortgage on a home they've inherited. If one person is awarded sole ownership of a property in divorce proceedings, that person can assume the full existing mortgage themselves.
Can a joint mortgage be transferred to one person? A joint mortgage can be transferred to one person, providing your lender agrees to it - they will need to assess your income and expenditure to see if you meet their affordability requirements.
Typically, removing a name from a mortgage could require you to pay off the loan in full or refinance it with a new loan. But, there are alternatives where you can take over the loan without paying off it off or refinancing. These could include mortgage assumption, loan modification and bankruptcy.
The lender of the original mortgage must approve the mortgage assumption before the deal can be signed off on by either party. The homebuyer must apply for the assumable loan and meet the lender's requirements, such as having sufficient assets and being creditworthy.
The right to potentially assume (take over) the mortgage.
All successors in California have a right to apply for an assumption of the loan, as long as the loan is assumable. The servicer may evaluate your creditworthiness, including your credit scores, when considering you for an assumption.