To sell a house with a residual and still ongoing mortgage, you must first choose whether to keep the same bank and consider the consequences on the tax benefits received and the mortgage. It is not in fact rare that those who have a loan for the purchase of a property decide to sell it to a third party, even if the mortgage is still in force: these loans usually have a very long duration and therefore it can easily happen that it occurs a sales opportunity when there are still installments to be paid. What to do?
From the point of view of the borrower who intends to sell a house with a mortgage to buy another , there are two solutions.
The first is that of the mortgage payment
This practice is usually used when buying a property from a construction company that had in turn contracted financing to complete the work, but in reality it is also widespread in buying and selling between private customers. With the takeover, the buyer takes over the repayment of the loan granted to the seller, replacing it in the repayment of the missing installments. In fact, the mortgage on the house on sale changes hands.
The second solution is the early repayment of the loan
In this case, the seller extinguishes the missing installments of the loan in a single payment, using the amount received from the purchaser of the property. In fact, the proceeds of the sale are used to pay off the loan in advance and then transfer the property to the buyer with the deed . However, it is always possible to extinguish the loan with own resources before the deed.
But there are other details to consider: for example, how to behave to sell a house with a mortgage and a mortgage ? The management of the mortgage is the thorniest practice. If the property for sale is the subject of a mortgage that is still active, it must be resolved before the sale. This is very simple if the takeover or redemption takes place at the same bank, which will maintain the mortgage. If, on the other hand, you switch to a second bank, you may need to apply a second mortgage, until the original bank resolves the one fixed at the time.
Finally, a last reflection concerns the opportunity to sell a house with a mortgage before or after 5 years from the activation of the mortgage: the 5-year threshold is in fact very important for the enjoyment of some tax benefits on the purchase of the first home , like a lower registration tax. In particular, the current tax legislation provides that in case of sale of the first home within 5 years of purchase, the tax advantages will be maintained for the acquisition of a new first home. So within 5 years you can still take advantage of lower taxes, but only if you buy a first home.