51
This is 100% routine and happens in almost every home sale.
Whoever you're buying from probably owes a mortgage too!
This gets handled during closing, and it's "behind the curtain". You/your finance company hands over a check for the full purchase price to the escrow agent, a neutral middleman who assures proper money flow. The escrow agent splits the ...
45
As RonJohn points out, selling a house that still has an outstanding mortgage balance is very common.
However, having a mortgage can make it harder to sell, one situation to consider is if the local real-estate market takes a dip after you buy. Say you put 5% down on a $150k house at 5% interest, in 3-years you decide to move, but the market value of the ...
29
The student loans are gone, all lenders see is a 2nd mortgage. Since the mortgage is secured by the home you'd likely have a hard time getting a better rate on an unsecured loan, but it doesn't hurt to go chat with some lenders and see what options exist.
I imagine the best chance for a lower rate would be a re-finance on the first mortgage (assuming there'...
28
It's that 4th note which concerns me. It's the idea of committing to 30 years of debt.
You're grossly over-thinking a problem that got solved the day after mortgages were invented.
https://blogs.findlaw.com/law_and_life/2017/07/can-you-sell-a-home-if-you-still-owe-on-your-mortgage.html
Most people sell their homes before the mortgage is paid. What ...
26
Maybe from a Credit Union or other smaller bank, but not a big-box bank.
why the lack of flexibility?
There is a huge secondary market for mortgages through the MBS (Mortgage-backed Security) market. This market consists of millions of mortgages that have sold by banks to other institutions, that package thousands of them together into "bonds" that are ...
13
My credit union offers 10, 15, 20 and 30 year mortgages. So there are ones available besides 15 and 30 years. The issue for the banks and credit unions is that if they let a customer pick their duration the correct setting of interest rates becomes more complex. The ones with non-standard duration's may also be harder to sell to investors.
One approach you ...
6
Yes, you want to look for a "bridging loan", see eg more info here: https://www.moneysupermarket.com/loans/bridging-loans-guide/
Bridging loans are designed to help people complete the purchase of a property before selling their existing home by offering them short-term access to money at a high-rate of interest.
As well as helping home-movers when ...
5
How it was explained to be by a mortgage officer many years ago:
You have to list all the liabilities.
You have to list your assets that are used for your normal financial activities: savings and checking accounts.
You have to list all your assets that are being used as the source of the down payment.
I have used that advice for every new mortgage, and ...
5
Most of the time assets have nothing to do with a successful mortgage application. Only three things matter: debt-to-income ratio, income, and to a lesser extent credit score. Equity in the home matters too, but I would classify that as debt-to-income ratio. If you disagree then 4 things. Also equity in the home can be supplanted by the likes of a VA or ...
5
I've worked for a few mortgage banks and they'd all be happy to give you a 23 year mortgage. Googling "custom mortgage term" returns pages from several other mortgage banks that offer the same. I'd wager that just about any large player in the mortgage market would be able to give you a custom term. It's not a hugely popular feature, though, because you'...
4
This is a totally normal process. I've done it several times. When you move, you sell the house and the proceeds of that sale cover the mortgage. While it's possible that some loans have a pre-payment penalty (which would essentially fine you for doing this), this is relatively uncommon. (Watch out for this when shopping for a loan — it's possible that this ...
4
Is it possible to get a mortgage in the US that is for a different
duration?
Yes, 15 and 30 year fixed rate mortgages are the most popular, but they are not the only options. Many banks also offer 20-year and 10-year fixed rate mortgages. There are also a host of hybrid loan options (7/1, 5/1, 3/1 ARM). 40-year mortgages have all but vanished, but you ...
3
There will be several impacts. Most of the immediate impacts will likely be negative, but in the long term, if you behave well, the impacts will likely be positive. That said, none of us can tell you exactly how many points your score will change by, because we don't have access to your entire data set.
In general, the immediate negative impacts will be:
...
3
You've asked (or implied) a lot of semi-related questions about how your finances will impact your loan costs. In order to answer them, it may help to step back and consider the bigger picture about mortgage decision making.
Banks generally want to know four things when it comes to approving a mortgage loan:
Is the property good collateral? A mortgage is a ...
2
Edit: I missed that my location and OP's location are different. Probably general advice is still generally applicable, but OP should check the specifics for their location.
I need to bring my credit score to at least 630 before lenders will even talk to me.
Whether this is true depends on a number of factors. However, the higher your credit score ...
2
A couple of points:
Firstly, a mortgage contract can always be terminated prior to the end of its term. Terminating early typically attracts a penalty payment. There are circumstances where the customer can still benefit financially even after paying the penalty; it all depends on the precise formula the lender uses to assess the penalty, how far into the ...
2
Expect that when they see your credit history they will want to know why you took out and paid off a small personal loan. The fact you have to explain it shouldn't hurt your application, but you should expect to have to provide in writing an explanation.
The addition of the loan if it adds a different type of loan to your credit history can be a good thing. ...
2
There is little need, as you can always overpay or payoff early.
Basically, if you want a 23 year mortgage, you take a 30 year, and simply overpay each month a bit, and after 23 years it happens to be paid off. The exact amount is not basic math but not too difficult either to calculate, the web is full of calculators.
You also have the extra advantage ...
1
You say you have 90k in assets. I would tap most of these to pay down the loan, saving 3 months for living expenses.
Some ideas:
A 401k loan (up to 50% of the value of the plan) would save you 6.5% on the amount, which is a risk-free tax-free return that you probably won't get in the market. Caveat to this: if you lose your job you may need to pay this ...
1
Recourse
A "recourse" loan is one in which the creditor can go after you personally for the balance. For instance first mortages are generally non-recourse loans, after the lender takes the house, they cannot pursue the borrower for the rest of the money.
Student loans are the ultimate recourse loan not written by actual mafia, because student loans ...
1
Consider taking out a completely new mortgage, in the name of yourself and your wife. Use that to pay off the old mortgage. Then it doesn't matter who was named on the old mortgage.
But you do need to work out who owns the house at the moment. That will be recorded at the Land Registry. If Mr P has a share in the house, then things may be difficult.
1
It is unlikely to be wise to omit meaningful asset accounts. If you have a joint savings account with your kid that has a few hundred bucks in it, feel free to omit the account. If you have an account that you're interacting with on a regular basis, however, you really want to include that account.
You mentioned paperwork and extra work as one of your ...
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