Selling an apartment with a loan is not unusual these days. Some have difficulty paying back. Others would like to buy a new apartment or similar at another address before their mortgage is paid off completely. How to get rid of this apartment with a loan?
At the beginning it should be mentioned that the sale of the apartment is a bit complicated, because there are 3 sides – the seller, the buyer and the bank. These parties must agree on all terms of sale. There are basically 2 main options for selling a mortgage flat.
Buyer and credit
The buyer takes over the mortgage and the repayment will continue under the same conditions. The second option is that the buyer pays the remainder of the mortgage on the price of the property and buys a clean property without debt. Both of these ways have their pros and cons.
In the event that the seller and buyer decides to take over the mortgage, it is necessary to familiarize him with the amount of debt on the property and the repayment terms. If the buyer agrees with the terms, it is necessary to notify the bank of this intention. You must send a notarized copy of the purchase and sale agreement. Then the bank will invite the buyer to verify his solvency.
The bank concludes a new agreement with the buyer
In other words, the bank verifies that the buyer will be able to repay the loan. This is a very similar process to applying for a mortgage. It may also happen that the bank considers the buyer to be insufficiently solvent and will require collateral for the loan from the guarantor.
If the bank agrees – it notifies both parties. The sale can be continued. First, the buyer pays the property price with a notary public. Then the debt and property are transferred to the buyer. Changes are also made in the land and mortgage register.
Purchase after loan repayment
An apartment with a loan can also be sold without the bank’s participation. If the buyer has sufficient funds, he can pay off the rest of the debt early and sell the property cleared of all debts.
The seller’s loan is always repaid at the very beginning! Later, only the remainder of the total purchase. In the event of financing the investment with a loan – the seller receives the amount only after presenting a document confirming the repayment of the entire debt. Without it, the bank will not agree to the loan settlement!
It should be known that after submitting the application for removal from the mortgage, the remaining part of the loan will be automatically launched. Few banking institutions agree to the simultaneous withdrawal of funds.