If selling home how much equity should be acquired first?

Hi,

I think the family member has to go through the same process as another buyer. In both cases, one needs to get a title deed prepared in order to get the ownership rights; then get the deed notarized at the office of Registrar of deeds.

Thanks,
Jerry.

Hi,

When you are selling property, your equity is the difference between the total mortgage payments till now and your home's fair market value. So you will be doing an appraisal before selling. It will depend on the lender as to how much equity he will accept.

It is better to take some time, for getting a better price due to higher home equity. But the equity will only be higher if the market prices are high enough.

thanks

Hi,

If you have taken a mortgage, then it will depends on the lender as to what amount of loan he"ll allow the buyer to assume or pay off instead of you doing it. The time period also depends on how much you will pay off for the mortgage if not the entire payment.

Regarding the rules, it's almost similar for the family member and another buyer. But it is advisable that you consult a real estate attorney for further clarifications.

Feel free to ask if you have any other query.

Thanks,

Caron.

I guess it would be good to have the house for a few years build up equity before selling to anyone. It is a thrity year mortgage. We all know how fast the years go by. Thanks for advice and help.

Hi,

That's a good idea. Even though it's a long term mortgage, you can always prepay it after you have built sufficient equity in your property. But if you pay off the mortgage after some years, then you may have to pay prepayment penalty; just ask your lender about it.

You can also ask the buyer to take over the responsibility of mortgage payments but this depends on your lender. And, I would advise you to take this step only after you have built enough equity.

All the best.

Thanks,

Caron.

Caron What does the prepay option entail, that is if it is even allowed on our loan? Maybe in fifteen years half way there a good amount of equity will be built up then. Do you actually get the equity to use for another home? First time home buyers here so I am not too familiar with all the terms. thanks. spkll1

Hi,

The prepay option or prepayment in mortgage is nothing but paying it before the loan period ends. But don't think of prepaying the loan before you have built up enough equity that can help you get a sufficient amount on selling the property. Your lender may charge fees for the prepayment but you can always negotiate with him.

The way you can use your equity is: when you have built up sufficient amount of equity, you will get a better price for your home, provided the market is doing well. With the sale proceeds, you can definitely look for a better home or another mortgage to buy a separate home.

Please refer to the section here for further knowledge on mortgage terms. And, if you have any other query, do let us know.

Thanks,

Caron.