To sell a flat with a mortgage is not unusual nowadays. Some people experience difficulties repaying, others would like to purchase new housing or a place on a different address before their mortgage is completely repaid. How to get rid of this flat?
All three parties have to agree
At the beginning it is important to mention that selling of the flat is more complicated as there are 3 parties interested – you, buyer and a bank. These sides have to come to an agreement in all conditions of the sale. Basically, there are 2 main possibilities how to sell a flat with a mortgage.
First, the buyer takes over your mortgage and the repayment continues under unchanged conditions. Second possibility is that the buyer repays the rest of the mortgage from the price of the property and acquires a clean property without debt. Both of these ways have their pros and cons.
The buyer can take your mortgage over
In case you and the buyer decide on taking your mortgage over, it is necessary to introduce him to the amount of debt on the property and the conditions of the repaying. If the buyer agrees with the conditions, it is necessary to notify your bank of the intent. In the bank, submit notarized copy of a purchase contract. Then the bank will invite the buyer to verify his solvency.
In other words the bank examines if the buyer will be able to repay the loan. It is a very similar process to the one of applying for a mortgage. Also it can happen that the bank will consider the buyer not solvent enough and will require securing of the loan with a guarantor.
In case the bank agrees, it notifies both sides and the sale can proceed. First the buyer makes a deposit of the property price with a notary. Next, the debt and the property are transferred to the purchaser. The change is also made with land register.
The property can be sold cleaned of the debt
In case the buyer possesses enough financial funds, he can early – repay the rest of the debt and sell the property cleaned of all debts. However it is necessary to follow the correct time of the repayment. If you repay the mortgage at a different time than the end of your fixation period is, the banks usually charge considerable fee for an early repayment.