"When you sell, the buyer's total purchase funds - including their down payment and their new mortgage loan - are used to pay off your remaining loan balance during closing. After the mortgage is paid and other costs are covered, any remaining money becomes your net proceeds."
"When your home sale closes, the mortgage is paid off automatically as part of the transaction. The buyer sends funds to the title company or closing attorney. The closing agent requests a final payoff amount from your lender. Your mortgage balance is paid directly to the lender. The lender releases its lien on the property."
Selling a house with an active mortgage is standard practice for most homeowners. The process is straightforward: obtain a payoff statement from your lender, list and sell the property normally, and at closing, the buyer's funds are used to pay off your remaining mortgage balance. The closing agent coordinates with your lender to determine the final payoff amount, which is paid directly from the buyer's funds. Once the mortgage is satisfied, the lender releases its lien on the property. After all costs and fees are deducted, any remaining equity is distributed to the seller. No special arrangements are needed to settle the loan beforehand since the payoff occurs automatically during the closing process.
#home-sale-with-mortgage #mortgage-payoff-at-closing #real-estate-transaction-process #seller-proceeds-and-equity
Read at Redfin | Real Estate Tips for Home Buying, Selling & More
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