How To Sell a House With a Home Equity Loan
Homeowners who need cash to make home improvements or cover expenses often borrow against the equity in their home. Home equity loans act as second mortgages secured by the property’s value. They can be an affordable way to access funds, but what about selling a house with a home equity loan?
It might seem complicated at first, but it doesn’t have to be. At Chattanooga Property Solutions, we buy houses with home equity loans, home equity lines of credit (HELOCs), second mortgages, reverse mortgages, and more, helping homeowners efficiently navigate payoff amounts and paperwork. In most cases, the process is straightforward, requiring sellers to pay off the loan from the sale proceeds.
How Borrowing Against Your Home Affects Its Sale
The first step in selling a home with a home equity loan is understanding how it differs from other products that use your home as collateral. A home equity loan provides a lump sum based on how much equity you have in the property, or how much of the property you’ve paid off. When you sell your house, you need to pay off the home equity loan in addition to any remaining mortgage balance.
HELOCs offer a revolving line of credit that you can borrow from and repay as needed. Because the HELOC balance can increase or decrease over time, many homeowners ask, “Can you sell a house with a HELOC?” You can, but you must pay any outstanding balance at closing, as with a fixed home equity loan.
Selling a home with a second mortgage follows the same path. Any sale proceeds first cover the primary mortgage, then the secondary debt. In any case, reach out to your lender for a home equity loan payoff when selling a home. This is one of the first steps to selling a home with equity debt and ensures you know how much of the sale proceeds will go toward debt.
What To Do When You Have Low Home Equity
If your home’s value falls short of its total debts, you can still sell. You can either build equity by making payments or wait for market improvements. If you need to sell quickly, you can bring cash to cover the difference at closing or explore the potential of a short sale, in which the bank forgives the portion of the mortgage you can’t cover.
Another simple and stress-free option for selling a house with a home equity loan is to work with a cash buyer like Chattanooga Property Solutions. These buyers handle the payoff process, close quickly, and help homeowners avoid extended listing periods. They can also deal with reverse mortgage versus home equity loan scenarios to help you make the best decision.
Selling a House With a HELOC? You Can Do It
Selling a house with a home equity loan or HELOC debt doesn’t have to be overwhelming. Chattanooga Property Solutions in Chattanooga, TN, can guide homeowners through the process of selling a house with a mortgage and handle the payoff at closing. Call (423) 454-3070 to get started today.