I am going to close on a house in a few weeks. Let's say that 10 years down the road I decide to sell it. When it is sold am I then using the proceeds to pay only the principal balance or is there some type of calculated payoff amount similar to what I've seen with some of my car loans?
2007-06-20 05:04:32 · 6 answers · asked by billy 2 in Business & Finance ➔ Renting & Real Estate
You will use the proceeds from the sale to payoff the loan. Now most mortgage companies will have some fees involved in your payoff figure. It won't be just the principal balance. All will include interest due through the actual date you payoff the loan which is why the payoff you receive when you sell the home will have an expiration date. Depending on when you made your last payment and when you actually payoff the loan will determine that amount. Some mortgage companies will also include other misc. fees with your payoff such as recording of satisfaction. It all depends on your mortgage company. Make sure to look at your payoff closely when you decide to sell your home.
Hope this is helpful.
2007-06-20 05:13:23 · answer #1 · answered by logic_150 2 · 1⤊ 0⤋
Assuming your loan has no applicable "pre-payment" penalty (many homes don't have them, and many disappear as long as you have the loan for 1-3 years), you will pay all remaining principal + unpaid principle/interest for the amount of days in the final month you had the mortgage + some possible "minor" lender settlement fees (rarely over $300).
Unlike when renting, you always pay a mortgage at the end of a month, so you might have say 15-25 days of principal & interest included in your "pay-off." You might likewise have money coming back to you if your mortgage pre-paid advanced property taxes or insurance.
If you call the customer service # for your mortgage company, you should be able to request a payoff for a certain date, and they'll usually quote you very accurately.
Keep in mind, just as you're paying some closing costs now, you'll likely pay closing costs (in addition to listing fee), when you sell. These can include escrow fees, transfer tax, title insurance, recording fees, appraisal fees, etc. These are independend of your loan "pay-off."
2007-06-20 07:38:56 · answer #2 · answered by R.E. Advice 3 · 0⤊ 0⤋
The payoff amount for mortgages is generally the principal balances. Some have prepayment penalties added to that, but when they do it's usually gone by the time you've had it 10 years.
2007-06-20 05:10:30 · answer #3 · answered by Judy 7 · 1⤊ 0⤋
The amount recevied from selling the house can be used to sell off the remaining installments and if some money is left, you can use as you wish.
2015-04-30 20:14:59 · answer #4 · answered by Bhaskar 2 · 0⤊ 0⤋
When you sell it you will use the proceeds to pay off the remaming amount on your motgage. All in 1 set payment. You will them have no mortgage at all after that is done.
2007-06-20 05:08:43 · answer #5 · answered by Anonymous · 0⤊ 0⤋
you are paying off the principle
2007-06-20 05:09:35 · answer #6 · answered by carly sue 5 · 0⤊ 0⤋