This is the remaining balance on your original home loan. You will need to pay off your mortgage in its entirety when your home is sold.
Home Equity Loans (2nd & 3rd Mortgages)
Any loan against the value of your home will also need to be paid in full after the sale of your home.
The bank or lending institution that currently owns your mortgage title may assess a pre-payment penalty. You should speak to your lender directly, and ask if they plan on assessing a pre-payment penalty. Once you know exactly how much that amount is, you may be able to negotiate with your lender to reduce or waive the pre-payment penalty, if there is any. You will also want to submit a formal pre-payment notice to your lender.
In most cases, it is not advisable to make major investments in your home right before a sale. There are however, a few things that can be done to increase the curb appeal, fix minor problems, or anything to make your home more attractive to potential buyers.
All closing costs associated with the sale of your home will be listed for you and for the home buyer in the final HUD statement. The buyer is generally responsible for all of these closing costs, which include:
- Loan Fee’s for the Buyer’s home mortgage
- Insurance Premiums
- Title costs (Examination and Insurance)
- Legal Documents and service fees
- Recording & Filing Fees
In some cases, buyers make a request for you as the seller to cover their closing costs as part of their purchase offer. We will negotiate these requests if they are made, and I will help you understand why it would be to your advantage to cover the buyer’s closing costs, and what limitations we can set to make sure we know the exact net of your home sale before closing. As the seller, you will be responsible for paying the Real Estate Broker commission fee.
The money that you make from the sale of your home is considered capital gains. The good news is that these profits can be excluded from your taxable income, up to $250,000 for an individual, or $500,000 for a married couple, as long as your home was your principle residence.
To exclude the full portion of those gains, you will need to have lived in your house for at least 24 months, in the five years previous to the sale date of the property. This is considered the “2 in 5 rule”.
Moving is not only a hassle, it can also be very expensive. Whether you’re moving to a new house in your neighborhood, or across the country, it’s important to estimate and plan for the full cost of moving from your home once it is sold.
So don’t forget, we are still in this to make a profit, however, it will come with some costs. So plan ahead and know exactly how much you are going to get out of the sale of your home in the end. This way you can plan for the home you are going to buy, and all of the costs that go along with that purchase!