There is a lot involved when selling your house. What do you do with your mortgage, for example? Are you taking this with you, are you taking out the mortgage or are you completely repaying the mortgage? And what does it mean if you pay off your mortgage when you sell your house? In this article you can read how it works.
House sold mortgage repayment
You take out a mortgage for a home. This property serves as collateral for the mortgage loan. If you sell the house, then in theory you always repay your mortgage and possibly establish a new mortgage on the new house. A notary then writes the mortgage deed at the Land Registry and possibly registers a new mortgage deed for your new mortgage.
You also need a notary to arrange the repayment of the sale with the bank. The buyer does not actually pay you any money if he or she buys the property, because he or she also establishes a mortgage on the property. The notary arranges this for you. You submit a request for repayment to a notary and he requests the repayment bill from the bank. It contains all amounts due, such as interest and the outstanding debt itself. After issuing the mortgage deed, the notary ensures that the mortgage is fully repaid. You can then take out a new mortgage to finance your new home.
Tip! Instead of taking out a new mortgage, you can take the current mortgage to your new home. You then retain the conditions of the existing mortgage, but in fact you take out a new mortgage on the new home. This is advantageous, for example, if your current mortgage has a low interest rate and good conditions. In the article ‘ Take along a mortgage ‘ you can read all about the advantages and disadvantages of taking along your mortgage.
Penalty interest when selling a house?
The sale of your home is one of the exceptions where you never pay a penalty interest for extra repayments, just like the end of your fixed-rate period. That is why selling your home is a good time to take a critical look at your mortgage and compare it with other mortgages.
House sold, and now?
When selling a home you sometimes have to deal with surplus value. This means that the proceeds from the sale are higher than the outstanding mortgage when you sell the property, for example due to an increase in the value of your property or due to repayments. You have to put this surplus value in the new home. If you do not do this, you are not entitled to the mortgage interest deduction on this part of the mortgage loan.
An extra repayment on the mortgage increases the chance of surplus value, because you reduce the mortgage debt. It is then better to wait a little longer with extra repayments and at a later time to repay extra on the new mortgage or use your own money for the purchase of your new home.