As a general rule, if the property is sold before the end of the mortgage, it must be settled in advance. This is especially true when a mortgage or lien (lender of money) is registered for the benefit of the bank. In this case, you will probably have to pay the loan before or at the latest on the day of the sale.
Maintain the credit after the sale or repay in advance
In the event of a negative equity , that is, if the proceeds of the sale do not cover the full amount of the outstanding principal, you must still repay the remaining balance to the lender. For any mortgage or bond to be waived, you can ask your banker for a transfer, which will allow you to pay the loan in monthly installments. However, without the security provided by the property, the granting of such a loan is, on the one hand, uncertain and will, on the other hand, probably be more expensive than the initial loan.
You may also wish to retain the mortgage after the sale and continue to repay the monthly payments. In this case, only the banker can accept or reject this arrangement. On the other hand, a difficult condition is to justify stable and sufficiently high incomes.
Compensation payable for early repayment
If you make a prepayment Early repayment of the loan is motivated by:
- a change of professional activity,
- the death of the borrower or his spouse,
- the cessation of activity of the borrower or his spouse.
The transfer of mortgage loan: the same loan for two acquisitions
It is also possible that the sale of a home and the pre-payment of the loan may precede the purchase of another property. If your contract allows it and if the banker agrees, then you can proceed with a mortgage transfer.
This system has the advantage, on the one hand, to keep the initial interest rate and on the other hand, to avoid the costs associated with the early repayment . If the previous loan was secured by a surety and not a mortgage, this first is also transferable from one purchase to another.
Regarding mortgage insurance, the borrower can keep the previous contract, this one covering the loan and not the property acquired. If it is a delegated insurer, you have the advantage to compare the offers on James Bond, either to renegotiate the amount of the contribution, or to change insurer on the due date.