FAQ: Buying and Selling Your Home With A Mortgage
Whether you’re moving up or downsizing, selling your current home to purchase a new one is time-consuming, life-changing, and like your valuables, as you move, should be handled with care.
What happens to my current mortgage if I sell my house?
When you sell, you use the proceeds from this home to pay off your current mortgage, and any remaining funds can be used toward your new home purchase. A good first step is obtaining your payoff amount from your mortgage servicer, so you are clear on how much is owed.
Do I have to sell my home and pay off my current mortgage before buying a new home?
There are pros and cons to buying or selling first. Choose wisely based on your own circumstances. If you sell your old home first, you can ensure you’re not stuck with two mortgage payments at the same time. If you buy first, you won’t be displaced between two homes.
Do I need to inform my mortgage company if I’m selling?
While you don’t need to inform your servicer if you put your house on the market, you will want to inform them once you’ve accepted an offer. This also ensures you have an updated, accurate payoff amount in time for your closing date.
How do I determine my home’s resale value?
There are home value estimator tools online that can give you an idea of your home’s market value. If you are using a real estate agent to sell your current home, they can provide a comparative market analysis. You can hire a professional appraiser, but these inspections can be costly. Keep in mind, it’s common for the buyer to obtain the appraisal as part of their loan process.
How much equity do I have in my home?
Once you determine your home’s resale value, you’ll have an idea of your home’s equity. It’s the difference between your loan payoff amount and the market value of your home.
What’s the difference between buyer’s and seller’s markets?
A buyer’s market occurs when supply exceeds demand. Simply put, there are more homes for sale than potential buyers. Real estate prices will decrease, and sellers have less negotiating power.
A seller’s market exists when demand exceeds supply. There is not enough homes on the market to meet buyers’ demand. Prices escalate, buyers likely have to negotiate, and bidding wars can take place.
Consult with your real estate agent on the state of your local and regional market, as well as how to shop smart for your new home, and strategize effectively for your home sale.
Whether you’re buying for the first time, or making a move into a new place, Supreme Lending Dallas is your partner for any home financing need. Call us today to get started!