How do home loans work when you have a home loan and want to sell your house and get a new home?

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Say, you have a home that you still owe $ $ on…..You want to sell this house and buy a new one. Would you take the money you get for selling your current home and put that toward paying off your current home….being left with only the mortgage payments on the new home.

7 Comments
  1. Reply
    goz1111
    May 2, 2011 at 2:58 am

    no one is going to buy your current house without clear title to the place, the only way to get clear title is to pay of all notes on the property, then afterward you can go and get a new note on a new home

  2. Reply
    jestduck1
    May 2, 2011 at 3:16 am

    As a Realtor, I see this all the time.

    You will need to have your home listed and speak with your favorite mortgage banker. Go ahead and start looking for a new home, but be aware that you should not write an offer on a home until you have a valid offer on your current home.

    You will have to use the proceeds from your current home sale to pay of your current mortgage debt, and can use any remainder as down payment on your new home, or finance an appreciative percentage of your new home – work that out with your banker.

    I strongly recommend against getting a bridge loan – that is a type of loan that allows you to own 2 properties while one is being sold under a single loan payment for a limited term. If your market area is poor right now or a buyer’s market, you could end up owning 2 homes and owing a ton of money every month.

    Your new house payment should be comfortable for your income level – if you can’t afford to go out to dinner at least 1x per week, you have too much home!

    Good luck and Happy House Hunting!

  3. Reply
    glenn
    May 2, 2011 at 3:56 am

    What most people do is they put their current house up for sale and go and look at homes to buy.

    They schedule both closings (the sale of the old home and the purchase of the new home) to happen at the same time. I have arranged this a thousand times. There is stress involved because you worry if one closing has a hitch.

    If you can afford to own both homes at the same time you can buy your new home first. If you can live with friends or relatives you can sell your old home first.

  4. Reply
    Califrich
    May 2, 2011 at 4:40 am

    Yes, you would pay off the mortgage from the proceeds of your house sale, and then get a new loan for the new home.

  5. Reply
    chatsplas@sbcglobal.net
    May 2, 2011 at 4:42 am

    In order to complete the sale of your current home, the proceeds are used to pay-off all of your loans on it. This is to transfer good title to new owner. You apply for new mortgage to buy new home.

  6. Reply
    Delores S
    May 2, 2011 at 4:48 am

    sounds like you are under contract with a mortgage company/bank. Well the laws are different in each state but I think you should just go and talk to a realestate agent (like you are looking to buy) and just say you are interested in purchasing a home. I went to the one with the balloon, and the representative/sales person was sooo helpful,full of information !! That way you get the jist of what you might be facing before you actually go forward, kind of like (doing your homework before making a life changing decision,) Don’t forget to read your present contract.(read All Of the FINE print) say you made a contract for a 30year mortgage well, you need to know if you have a fixed rate and if you change that by selling do you have to (now make a balloon payment) lots of dough to get out of the contract. Hmmmmmm. Read and relax and reread it.. Some people are in forclosure right now because they failed to understand what they signed. Some people take a flexible rate, well when the interest rates go up so do their Mortgage Payments, by the same token when rates go down payments may go down only the interest part. The problem is ( how long will it take to pay off the INTEREST on the home loan? If rates keep going up it takes a lot longer, or there may be a balloon payment due, or you might have fees for something else due to the lender.If it is a simple as selling and purchasing a new home fine, but there will be closing costs for the new home and lawyers fees,ect. I have heard that “sale buy owner cuts out some of those fees but you or the buyer pays for inspection fees ect.

  7. Reply
    bhuiiddy m
    May 2, 2011 at 5:19 am

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