Selling your home can feel stressful, and when you add a second mortgage to the mix, things can feel exponentially more complicated. You might even think that you can’t sell, and you’re stuck paying the ever-increasing bills.
You can sell your house fast in Savannah when you have more than one loan. Working with experts who know how to sell a house with a second mortgage can make it simpler than you might expect.
What Is a Second Mortgage?
A second mortgage is a loan that’s secured by your home, on top of your primary mortgage. It can be a home equity loan, a home equity line of credit, or another type of borrowed money tied to your property.
Calculating How Much You Owe Is the First Step
Your first step in how to sell a house with a second mortgage is learning all about the mortgages you have. This means figuring out both the primary and second mortgage balances.
The balance on your statement may not accurately reflect what you owe. For the most current outstanding loan debt balance, call both lenders to request mortgage payoff amounts.
Some lenders also charge a fee if you pay off a loan early. It’s not as common as it used to be, but confirm your lender’s policies so you know exactly what you’ll need to pay after you sell.
Determine Your Home Equity
As you pay down your mortgage, you build property equity. To calculate your equity, add up how much you owe for both mortgages and subtract that from the amount that the house could realistically sell for.
For example, if your home could sell for $300,000 and your total mortgage debt is $220,000, you may have $80,000 in equity before expenses and closing costs. Agent commissions, taxes, title fees, and other expenses reduce the amount you take home.
What If the Numbers Don’t Add Up?
When your house sells, the title company pays off your first mortgage, then your second mortgage, then closing costs. Whatever’s left from the home sale proceeds is yours. As long as the sale price covers both loans, the number of mortgages you have doesn’t matter.
But not all homeowners have enough equity to pay off both loans. If your sale price won’t cover everything, you may need to negotiate with lenders, bring cash to closing, or explore a short sale.
This can make selling a house with a second mortgage harder, but you still have options. A cash buyer can sometimes simplify the process by purchasing the house as-is, without any additional fees or closing costs, saving you thousands.
Talk To Home Buyers of Savannah
Do you need help selling? Whether you’re trying to figure out how to sell a house with a second mortgage or sell a house with negative equity, Home Buyers of Savannah offers straightforward solutions. Give them a call at (912) 513-8744 to discuss options and get a fair cash offer on your property.
