How to sell a mortgaged home in Cumbre del Sol

How does selling a mortgaged home in Cumbre del Sol work?

Perhaps your family has grown. Or maybe your children are older now and need their own bedrooms. These are two frequent examples of the need to sell a home in Cumbre del Sol. And they can arise suddenly, often before your mortgage has been paid off.

In this case, first and foremost, you should know that selling your mortgaged home is completely legal. However, it is both obligatory and ethical that you inform the buyer of this fact so that they know what to expect. Ideally, you should show them a certificate of pending debt. This document will detail the payments you have already made towards the loan, as well as those still to be paid.

When agreeing on the conditions of sale with the buyer, you must also decide what will be done with the mortgage. Here, you have three main options from which to choose.

1.- Settle the mortgage on your home in Cumbre del Sol

This is the most common option. The buyer will pay you the amount agreed for your property and, with it, you will pay off the loan. However, two circumstances may present themselves:

• The amount you receive may be lower than the amount pending payment on the mortgage. In this case, you’ll need to use all of the money generated from the sale to partially pay off your loan. Then, you’ll need to take out a new loan with the bank in order to finish paying off the amount remaining.
• The amount you receive may be higher than the mortgage debt pending payment. This is more common. As a result, you’ll need to spend part of the money received on paying off the loan. Then, you’ll be able to pocket the rest.

However, in both cases, you must exonerate the buyer from your mortgage debt. To do so, after settling the loan, you’ll need to ask the bank for a certificate of zero debt. This document will prove that the mortgage has been fully paid off and must be provided to the person purchasing your property.

2.- Subrogate your mortgage in Cumbre del Sol

Another possibility when it comes to selling your home is to agree on the subrogation of your mortgage with the buyer. This legal process means that the loan will continue under the same conditions, but the holder will change. The mortgage will then be in the name of the person purchasing your home and you will be freed from the debt. Meanwhile, the rest of the money paid to you will be yours to keep.

For example, imagine that you have a pending mortgage of 100,000 euros and you sell your home for 150,000. The buyer will take care of the loan, while you will be exonerated from the debt and will receive 50,000 euros.

However, this is not a simple operation. Firstly, the bank will study your buyer’s credit risk. If this is too high, they will not be accepted. Likewise, the buyer will not be able to choose their lending bank nor change any of the conditions, which they may not agree to.

On the other hand, they’ll save on certain costs that will be charged to you or your bank. For example, the costs of the subrogation itself. What’s more, this option offers another added benefit for the buyer: they will be able to buy your home in Cumbre del Sol at a much lower price than it is worth. However, of course, they will then need to pay a monthly mortgage.

3.- Take out a bridge mortgage

This is a third option for selling your mortgaged home, though it is quite complicated. For this, we recommend seeking advice from a Cumbre del Sol estate agency like ours to get the ball rolling.

A bridge mortgage is an option designed precisely for those who wish to move home but have not yet finished paying their previous loan, and who will also need to take out another mortgage for their new home.

Instead of having to pay two mortgages, the entire purchase and sale operation is covered by one single loan. If you take out this type of mortgage, you’ll need to pay a single monthly payment which, normally, matches that of your original mortgage. However, you’ll be granted a grace period on your new mortgage until you sell the first property.

Imagine that you have a home with a pending mortgage of 50,000 euros and a monthly payment of 300. You buy another home and need to borrow another 50,000 euros. If you take out a bridge mortgage, the new debt would be 100,000 euros. But, to start with, you’ll only pay the 300 euros of your original loan. For the rest of amount due, you’ll be offered a grace period until you sell the first home.

Now you know how to sell a mortgaged home in Cumbre del Sol. But if you want to do so in total peace of mind, get in touch with our estate agency. We’ll be delighted to advise you.