If you are underwater on your mortgage, you may be wondering how to sell your house. Being underwater means that you owe more on your mortgage than your house is worth. This can make it difficult to sell your house, as most buyers will not want to take on a mortgage that is larger than the value of the property.
However, there are a few ways to sell your house when you are underwater. One option is to sell the house “subject to” the existing mortgage. This means that the buyer will take over your mortgage, but you will still be responsible for any payments that are due. This can be a risky option for the buyer, as they will be responsible for any losses if the value of the house continues to decrease.
Another option is to have the buyer assume your loan. This means that the buyer will take over your mortgage and become the new owner of the loan. This can be a more attractive option for buyers, as they will not have to obtain their own mortgage. However, you may need to qualify for the assumption, and the lender may require you to pay a fee.
Advantages of Selling Subject to
There are a few advantages to selling your house subject to. One advantage is that it can be a quick and easy process. You do not need to go through the hassle of listing your house with a real estate agent or negotiating with buyers. You can simply find a buyer who is willing to take over your mortgage and then close the deal quickly.
Another advantage of selling subject to is that you can avoid paying closing costs. When you sell your house through a traditional real estate transaction, you are typically responsible for paying closing costs. However, when you sell subject to, you do not have to pay these costs. This can save you a significant amount of money.
Advantages of Having Someone Assume Your Loan
There are also a few advantages to having someone assume your loan. One advantage is that you can get out of your mortgage without having to go through the difficult process of a short sale. A short sale is when you sell your house for less than the amount you owe on your mortgage. This can be a difficult process, as you will need to get approval from your lender. However, if you can find a buyer who is willing to assume your loan, you can avoid the short sale process.
Another advantage of having someone assume your loan is that you can get out of your mortgage without having to pay closing costs. When you sell your house through a traditional real estate transaction, you are typically responsible for paying closing costs. However, when you have someone assume your loan, you do not have to pay these costs. This can save you a significant amount of money.