I'm selling my home soon for 25,000 more than I paid for it. Where does the equity go that is built up in my mortgage through the finance company? Is it paid out to me or go to the payoff price of the house? Thanks for your help!
2007-02-19 06:48:08 · 6 answers · asked by Chris W 1 in Business & Finance ➔ Personal Finance
You keep the difference (profit) between your selling price after deducting your mortgage balance and the selling costs (Title insurance fees, realtor fees, etc.)
In other words, 'equity' is the part of the value of the house that YOU OWN.
2007-02-19 06:57:01 · answer #1 · answered by flywho 5 · 1⤊ 0⤋
The equity belongs to you and is paid to you by your real estate agent after closing, minus his/her fee. Be very careful when negogiating your fee with your agent. $25,000 is not a lot of money when you account for the agent's 6% cut, the attorneys fees and any closing costs you have to come out of pocket for. I recommend using a discount broker or negogiating down to 4%. A graduated fee is also an option - the longer the house stays on the market, the less the agent earns. Good luck.
2007-02-19 14:56:09 · answer #2 · answered by Anonymous · 0⤊ 0⤋
If you don't want the equity, I'll take it from you.
If you're selling it for $25,000 more than what you paid for and you've been paying on your mortgage, then you'll have more than $25,000 coming back to you.
It's your money do whatever you want with it.
El
2007-02-19 20:43:44 · answer #3 · answered by El_Nimo 3 · 0⤊ 0⤋
The equity goes to you, but you will have to pay taxes on it unless you are over the age of 55, then you have a one time tax relief where you dont have to pay the tax. The taxes will probably not be held out through the sale but you will have to pay them the following year when you file your taxes. If you are smart you will take out the appropriate taxes now and put them away so you don't get into tax trouble. A lot of people don't do this and when the time comes get into bigger trouble when they have to pay penaltied and interest that will take forever to pay.
Good Luck. Be Smart.
2007-02-19 15:07:50 · answer #4 · answered by devilgal031948 4 · 0⤊ 0⤋
You will pay off your remaining balance to the finance company and whatever is left is your profit. Usually a title company figures all this for you and cuts you a check after all expenses have been met.
2007-02-19 15:01:21 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Any money above what you owe the mortgage company is given to you in cash. (less fees, like broker fees and such).
2007-02-19 14:55:42 · answer #6 · answered by miketorse 5 · 0⤊ 0⤋