Thursday, December 10, 2020

Sale of an apartment with a loan – What do you need to know when selling?


Mortgages in the country are extremely popular, especially among young people, because hardly anyone can afford to buy their own apartment for cash. Entering a relationship with the bank for several decades can often be the only available way to acquire your own home. But what if at some point you want to sell this property? There can be many reasons – for example, moving out because of an interesting job offer, or a growing family and other housing needs. Regardless of the reasons for our decision, many questions arise with it. Can I sell a flat with a loan? If so, how do you sell a flat with a mortgage? What is worth knowing about the whole process?

Can I sell a flat with a loan?

Can I sell a flat with a loan?

Doubts about whether it is possible to sell a flat with a mortgage usually arise from the fact that after incurring a liability, the bank is always entered in the land and mortgage register. Contrary to appearances, this does not matter much in the context of selling a house or apartment. When securing a loan with a mortgage, the bank will obtain real estate rights only when the borrower proves to be insolvent and will not be able to repay the loan.

If we repay the loan on time, we have nothing to fear, because we are the owner of the property and we have the opportunity to dispose of it, including its sale. In that case, can you sell a flat with a mortgage without the bank’s permission? No, because the sale of an apartment with a loan will require the bank to issue a certificate of the amount to be paid,

How to sell a flat with a loan?

How to sell a flat with a loan?

The process of selling an apartment with a loan is relatively complex, which does not mean that it is very difficult to carry out. Just follow the instructions below and successfully completing it should not be a problem for us. First, we should go to the bank where we repay the mortgage, and then ask for a certificate of our debt. It should contain not only the amount that remains to be paid to us, but also our data (including the bank account number intended for repayment of the loan) and the bank’s consent for early repayment. We can start looking for a buyer just like in the case of traditional real estate sales – placing ads on auction sites and newspapers, as well as by contacting the real estate office.

In each announcement, we should clearly include information that the property is encumbered with a mortgage. Once we find potential buyers, further action depends on whether the buyer buys an apartment or a house from us for cash, or intends to take out a mortgage. In both cases, we should draw up a preliminary contract and collect an advance from the buyer, while if a loan is taken for the purchase of the property, it will not be possible without a notary’s confirmation. Receipt of the advance from the buyer will allow the bank to obtain the so-called promise, ie the promise to delete the mortgage from the land and mortgage register after the loan has been repaid. Importantly, such a promise is only valid for 30 days. Therefore, it is not worth going after it if we plan to conclude an current sales contract and repay the loan in a few months. Having a valid promise, we can proceed to write a notarial agreement for the sale of real estate,

After the conclusion of the contract, the buyer (or his bank, if he took a mortgage to buy the property) transfers the funds to the seller. Payments are made in two parts: one is transferred directly to the bank to pay off the mortgage and the other to the seller. Obviously, the larger the sales amount over the loan amount, the greater our current sales earnings. After payment, we can apply to the court to remove the mortgage from the repaid property.

Sale of an apartment with a mortgage – summary

Sale of an apartment with a mortgage - summary

It is worth knowing the answers to such questions as “how to sell a flat with a loan?” or “can I sell a flat with a mortgage?” Even if, at the time of taking out the mortgage, it seems to us that we will pay it back to the end according to the schedule, life may have other plans for us. 25, 30 or 35 years, during which we will have to pay back the mortgage, it is a lot of time, especially considering how normalized and easy moving abroad has become (for example, due to a better job offer). So there is a high probability that at some point we will dream about selling mortgaged property. In this case, there is no reason to worry, because the whole process is not as difficult and impossible to pass as it might seem at first glance.

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