Can I sell an apartment bought with a mortgage? How to sell an apartment burdened with a mortgage

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Unfortunately, none of us is immune from the sudden loss of a job, an unexpected illness or an addition to the family. In life, both sad and joyful events can happen. And even such desirable housing purchased on credit will soon become burdensome or unnecessary.

Can I sell an apartment bought with a mortgage? We will try to figure it out today.

When is such a deal needed?

Employees of lending banks often hear from their borrowers: “I want to sell an apartment on a mortgage, but I don’t know where to start.” The sale of an apartment that is pledged by a bank is still a rare phenomenon for our compatriots. However, such cases have already been encountered in modern banking practice. For example, a borrower purchased an apartment on a mortgage, carefully paid current payments, but then, due to some circumstances, he needed a larger housing. In this regard, he is looking for a buyer for his living space withthe help of a re altor or on your own.

The proceeds are used to repay the loan, and the rest becomes the first installment when purchasing a larger living space, but under a new loan agreement.

The situation may be different. If, after a certain period of time, a bank client who has received a mortgage cannot continue to repay the loan, then a buyer is also sought for this property. Then a debt transfer agreement is drawn up, but only with the consent of the bank. The buyer has the right to purchase the property, but he is obliged to repay the debt to the bank, in other words, he becomes his debtor.

There are situations when a homebuyer does not have the amount needed to buy a larger home and is also going to take out a mortgage loan. This procedure is more complicated, since the bank will need to approve his candidacy, assess his financial capabilities, so that the loan repayment guarantees are preserved.

Alienate property from the bank

If the borrower has insurmountable circumstances that do not allow making payments in full, the bank is primarily interested in meeting him on the issue of selling residential real estate. If a buyer for housing has not yet been found, the institution offers its client a reliable and trusted partner in order to complete the transaction. However, the borrower must understand well how to sell an apartment burdenedmortgage. This is a non-standard transaction and may result in a reduction in the sale price of the home.

The bank is interested in the loan being repaid and there are no overdue payments. If the borrower, for a number of reasons, cannot repay the loan, but agrees to repay it by selling the apartment, then the financial institution, as a rule, forecloses on the collateral. This is happening out of court.

It is possible to sell an apartment that is in a mortgage, provided that the settlements with the buyer will be carried out through the bank and under the control of the loan officer. This procedure for the alienation of pledged property is described in detail in the Mortgage Law.

The pledge of an apartment imposes some restrictions on the disposal of this legal right.

Looking for a buyer

If you want to sell an apartment bought on a mortgage, you must obtain the consent of the bank. Once you have secured his approval, you need to choose the best sales scheme.

Let's consider possible ways to sell

There are two options for such transactions. Which one is most suitable in your case - the bank, the buyer and the seller will decide. The methods differ significantly from each other. It is very important when and under what conditions the pledge will be removed from the property - before the registration of property rights or after it.

In the first situation, the bank gives its consent to the replacement of the owner, and then removes the encumbrance. As a result, for some timethe mortgagor is the new owner of the apartment - the buyer. He places the funds in two safe deposit boxes. One stores the amount that is equal to the balance of the debt to the bank, the other - the rest. Operations with cells are carried out under the control of a bank employee. After registration of property rights, the same employee withdraws the balance of the debt from “his” cell and hands the buyer a document on the removal of the encumbrance. The seller of the apartment receives the money from the second cell. This completes the deal.

Can I sell an apartment bought with a mortgage in another way?

Yes, there is another option for such a deal. In the second case, the borrower deposits the balance of the debt, as well as the accrued interest on the current loan, into his bank account. This is done so that the financial institution writes off this amount and issues a letter to the borrower stating that his obligations to him have been fulfilled and the encumbrance from the housing has been removed.

To do this, the seller can draw up an agreement on the sale of an apartment (preliminary version), after the conclusion of which the buyer will transfer to the borrower the amount necessary to close their mortgage loan. In turn, the borrower will deposit funds into his bank account before submitting the relevant documents for registration of property rights. You can hand over all the necessary papers to remove the encumbrance and register the sales agreement on the same day.

Rare but possible deal

When asked whether it is possible to sell an apartment bought with a mortgage, employeesbanks usually answer that this transaction is more complicated than usual, but it is possible. The term after which its implementation is possible is set by the bank.

Today there are three ways in which you can sell an apartment bought on a mortgage. The first option is self-selling. It implies the transparency of the transaction and the obligatory consent of the creditor bank to it. After the consent is received and the amount of debt on the loan is finally determined, an agreement is concluded with the buyer. It must be notarized. The buyer then pays the creditor bank the amount owed by the seller. After that, he receives a receipt and a document on the absence of debt.

Within the specified period, the seller must officially register the removal of the encumbrance with the relevant authority and the transfer of ownership of the sold apartment. The contract of sale must also be registered. The difference in funds between the amount owed to the bank and the price of the apartment is stored in a safe deposit box that has certain access conditions.

Option two - to sell the loan. It differs by the subject of sale. They are mortgage loans. This will also require the consent of the creditor bank. In this case, he has the right to approve (or not approve) the candidacy of the new borrower. Only then is the loan reissued.

An agreement is made to transfer the debt to the buyer, who accepts the obligation to repay the debt. In this case, the apartment is still pledged to the bank. Besides,one financial institution can also redeem a loan from another (on-lending). But they, as a rule, perform such operations reluctantly, due to the fact that they are not interested in losing their customers.

Third option - unofficial

This is a dubious method in every respect. For its implementation, it is necessary to find a buyer who wants to repay the loan ahead of schedule. Finding such a person is quite difficult. In addition, in this case, the mortgage loan must be repaid ahead of schedule and without pen alties. If you do not know how to sell a house on a mortgage, then you need to consider that the transaction will take place in the same way as with an apartment.

Other issues related to the sale of a mortgage apartment

Quite often, people get a lot of problems when they get long-awaited housing. They are mainly associated with a change in living conditions, loss of work, inability to repay a loan. For example, many are interested in the question of whether it is possible to sell an apartment on a military mortgage. Such a deal is possible, but subject to the consent of the creditor bank and the Ministry of Defense.

Today you learned whether it is possible to sell an apartment bought with a mortgage. We hope that the information received will help you to correctly conduct such a transaction.