Do I need to clear any mortgages or loans before selling?

Answer

Yes, if you have a mortgage or any outstanding loans on your property, you'll need to clear them before selling. Here’s how it generally works:

Paying Off the Mortgage: When you sell the property, the proceeds from the sale will first be used to pay off the remaining balance of your mortgage. The remaining amount after that is yours.

Outstanding Loans: If you have other loans secured against the property (e.g., home equity loans), those will also need to be paid off from the sale proceeds.

Prepayment Penalties: Check with your lender if there are any prepayment penalties or fees for paying off the loan early. Some mortgages have clauses that charge a fee if the loan is paid off before the term ends.

Settling Debt: If your loan balance exceeds the sale price of the property (i.e., you owe more than the home is worth), you might need to work out a strategy with the lender, such as negotiating a short sale.

Clear Title: The title of the property needs to be clear for the buyer to take possession. This means any liens (such as unpaid loans or debts secured against the property) must be settled.