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Selling a home with two mortgages

On Behalf of | Nov 13, 2017 | Residential Real Estate |

Homeowners in California who are saddled with two mortgages may find it easier than they think to sell their home. The process of selling a home with two mortgages is similar to that of selling a home with just one mortgage, but it is important to be aware of all the facts.

One of the main reasons homebuyers obtain two mortgages is to avoid paying private mortgage insurance, which is required if a 20 percent down payment is not submitted for a home purchase. With a piggyback mortgage, homebuyers can submit a 10 percent down payment, finance 80 percent of the mortgage with one loan and then use another mortgage to finance the remaining 10 percent. This is a viable option for people who are capable of making the monthly payments for both loans on time.

For a regular home sale to occur, the value of the home has to exceed the total amount of both of the mortgages. This may entail consulting with an agent to devise a way to sell the home so that the income is enough to satisfy the amounts that are owed on both liens and possibly have enough left over to result in a profit. After the sale closing, both mortgages will be paid off by the title company, and any remaining funds will be issued to the home seller.

A real estate attorney may assist clients by working to ensure that their rights and interests are protected during the sale or purchase of real estate. The attorney may litigate to resolve disputes regarding zoning laws or lack of disclosure. Additional services may include overseeing real estate closings, drafting and reviewing real estate agreement, negotiating contract terms, handling conflicts pertaining to land titles and supervising short sales.