Unfortunately, none of us is safe from a sudden loss of work, an unexpected illness, or adding to a family. In life, both sorrowful and joyful events can happen. And even purchased on credit such a desirable home will soon become burdensome or unnecessary.
Is it possible to sell an apartment bought in a mortgage? We’ll try to figure it out today.
When is such a deal necessary?
Employees of creditor 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, which is pledged to the bank, is still a rare phenomenon for our compatriots. However, in modern banking practice, such cases have already occurred. For example, a borrower purchased an apartment on a mortgage, carefully paid current payments, but then, due to some circumstances, he needed a larger apartment. In this regard, he is looking for a buyer for his living space with the help of a realtor or on his own.
The proceeds go to repay the loan, and the remainder becomes the first installment for the purchase of larger housing, but already under a new loan agreement.
The situation may be different. If after a certain period of time a bank customer who has received a mortgage cannot continue to pay a 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 real estate, but it is incumbent upon him to pay off the debt to the bank, in other words, he becomes his debtor.
There are situations when a home buyer does not have the amount needed to purchase a larger living space, and is also going to take a mortgage loan. This procedure is more complicated, since the bank will need to approve its candidacy and evaluate its financial capabilities so that loan repayment guarantees are maintained.
We alienate real estate from the bank
If the borrower has encountered insurmountable circumstances that do not allow making payments in full, the bank is primarily interested in meeting him in the matter of selling residential real estate. If a buyer for a home 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 have a good understanding of how to sell an apartment burdened with a mortgage. This is a non-standard transaction, so it can lead to a decrease in the sale price of housing.
The bank is interested in the repayment of the loan and no late payments. If the borrower for some reasons cannot repay the loan, but agrees to repay it through the sale of the apartment, then the financial institution, as a rule, charges a security. This takes place out of court.
It is possible to sell an apartment located in a mortgage, provided that settlements with the buyer will be carried out through the bank and under the supervision of a loan officer. This procedure for the alienation of pledged property is described in detail in the law on mortgages.
The encumbrance of an apartment with a pledge imposes certain restrictions on the disposal of this legal right.
We are looking for a buyer
If you want to sell an apartment bought on a mortgage, you must get the consent of the bank. Once you have secured its approval, you need to choose the best selling scheme.
Consider possible ways to sell
There are two options for conducting such transactions. Which is most suitable in your case - the bank, the buyer and the seller will decide. The methods are significantly different from each other. It is very important when and under what conditions a deposit will be withdrawn from real estate - before or after registration of property rights.
In the first situation, the bank gives its consent to the replacement of the owner, and then removes the burden. As a result, for some time the mortgagor is the new owner of the apartment - the buyer. He puts the money in two cells in the depository. In one, an amount is stored that is equal to the balance of the debt to the bank, in the other, the remainder. Operations with cells are carried out under the supervision of a bank employee. After registering ownership rights, the same employee removes the remaining debt from “his” cell and hands the buyer a document on the removal of the burden. Money from the second cell is received by the seller of the apartment. This concludes the deal.
Is it possible to sell an apartment bought on a mortgage in another way?
Yes, there is another option for such a deal. In the second case, the borrower deposits the rest of the debt into his bank account, as well as the accrued interest on the current loan. This is done so that the financial institution writes off this amount and gives the borrower a letter stating that its obligations to it have been fulfilled and the encumbrance has been removed from the housing.
For this, the seller can draw up an agreement on the sale of an apartment (preliminary version), after which the buyer will transfer to the borrower the amount necessary to close his mortgage loan. In turn, the borrower will deposit funds to his bank account before submitting the relevant documents for registration of property rights. You can hand over all the necessary papers to remove the burden and register the sales contract in one day.
The deal is rare, but possible
When asked whether it is possible to sell an apartment bought on a mortgage, bank employees usually answer that this transaction is more complicated than usual, but it is possible. The period after which its implementation is possible is established by the bank.
Today, there are three ways in which you can sell an apartment bought with a mortgage. The first option is self-sale. It implies the transparency of the transaction and the obligatory consent of the creditor bank to it. After the consent is received and the loan debt amount is finally determined, an agreement is concluded with the buyer. It must be notarized. Then the buyer pays the creditor bank the amount that the seller owes. 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 appropriate authority and the transfer of ownership of the sold apartment. Be sure to be registered and the contract of sale. The difference in funds between the amount owed to the bank and the price of the apartment is stored in a bank cell with certain access conditions.
Option two is to sell a loan. It is distinguished by the subject of sale. It is a mortgage loan. For this, you also need to obtain the consent of the creditor bank. In this case, he has the right to approve (or not approve) the candidacy of a new borrower. Only then does the loan reissue.
An agreement is being drawn up on transferring debt to a buyer accepting an obligation to pay off a debt. In this case, the apartment remains pledged to the bank. In addition, one financial institution can buy out a loan from another (re-lending). But they usually perform such operations reluctantly, due to the fact that they are not interested in the loss of their customers.
Option Three - Unofficial
This is a dubious way in every way. 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 must be repaid ahead of schedule and without penalties. If you do not know how to sell a house in a mortgage, then you need to consider that the transaction will be the same as with the apartment.
Other issues related to the sale of a mortgage apartment
Quite often, people get a lot of problems with getting the long-awaited housing. They are mainly associated with changes in living conditions, job loss, 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 transaction is possible, but with the consent of the creditor bank and the Ministry of Defense.
Today you found out whether it is possible to sell an apartment bought in a mortgage. We hope that the information received will help you to conduct such a deal correctly.