Selling a mortgaged property may sound complicated, but it’s actually more common than you might think. Nowadays, many homeowners who still have a mortgage manage to sell their properties without major issues, either making a profit or simply freeing themselves from a financial commitment they no longer wish to maintain. If you find yourself in this situation, this article will provide clarity on the process.

¿So, can it be done?

The short answer is: yes, you can sell a property with a mortgage. You don’t have to wait until you’ve fully paid off the loan to sell your house or apartment. However, there are a few key steps you must follow, and this is where having the right advice makes all the difference.

The process in a nutshell

When you decide to sell a property that still has a mortgage, the outstanding loan balance is paid off with the money the buyer provides. The process usually follows these steps:

1. Obtain an account statement: The first step is to request an account statement from your bank or financial institution, detailing the mortgage balance and the terms for paying it off. This document is essential in determining how much of the sale price will go toward paying off the debt.
2. Negotiate with the buyer: The next step is to reach an agreement with the buyer, who will be aware that the property has a lien. It’s crucial to be clear on how the payment will be structured: a portion will go directly to the bank to pay off the mortgage, and the rest will go to you.
3. Mortgage release process: Once the debt is paid, the bank issues a release letter, which is the legal document that allows the buyer to register the property in their name without any issues. While this may sound simple, this step can be bureaucratic and slow, so it’s advisable to be well-informed and have the proper support.

¿Can you buy a mortgaged property using a loan?

Yes, you can buy a mortgaged property using a mortgage loan. Though it may seem complicated at first, it’s a perfectly viable process that frequently happens in the real estate market. Here’s how it works:

1. Assessment of the buyer and existing loan: When you decide to buy a mortgaged property using a loan, your bank will evaluate both your creditworthiness and the legal status of the property you wish to purchase. This step is essential to ensure there are no legal or financial issues that could delay the purchase.
2. Settlement of the existing debt: Once your mortgage loan is approved, the seller’s bank (where the current mortgage is held) will receive a portion of the money from your loan to pay off the outstanding mortgage balance. The remaining amount will go to the seller, covering the final sale price of the property.
3. Mortgage release: The seller’s bank will handle issuing the mortgage release letter, a crucial document ensuring the property is free of liens. This process can take a few days or weeks, depending on how quickly the bank handles the necessary paperwork.
4. Signing the deed and transferring ownership: Once the mortgage is released, the next step is signing the deed before a notary. Here, your bank will release the remaining funds, and the property will be registered in your name. At this point, the lien becomes the new mortgage you acquired, and the property is officially yours.

¿What happens if you have more than one mortgage?

In some cases, homeowners may have more than one mortgage on the same property, with the most common combinations being Bank-Infonavit or Bank-FOVISSSTE. While this adds a layer of complexity to the sale process, it remains entirely feasible. In these situations, having the guidance of a real estate professional is even more crucial, as they can manage negotiations with all the involved institutions and ensure that the mortgage release process is carried out efficiently.

Conclusion

If you’re considering selling your mortgaged property, you’re not alone. Many homeowners make this decision to get rid of debt, improve their financial situation, or simply move to a new property. The process is completely doable, but as with all real estate transactions, having the right advice can make the difference between a quick and efficient sale or a prolonged and stressful experience.

At Camacho Bienes Raíces, we have a team of professionals who will guide you throughout the entire sales process, ensuring it is done safely, quickly, and without complications.

Contact us today and find out how we can help you sell your mortgaged property hassle-free!