When you realize that an apartment bought with a mortgage can be sold, and you don't have to wait 10-20 years until you pay off the debt, you become happier, don't you?
In this article we will tell you some advice if you need to sell your property with a mortgage.
The classic scheme of purchasing a first home: a modest apartment on the outskirts of civilization, bought with a mortgage just for not paying for rent.
But over time, the idea of comfort changed. And now the owner decides to exchange their apartment for something bigger or just to get money for other needs.
Fortunately, there are a great many such examples. Since mortgages are one of the most popular ways to purchase real estate in Cyprus, they have long learned how to solve the issues of such purchases.
Let's call our hero a Salesman. And step by step we will analyze how they sell the mortgage house.
Initially, our Salesman acted like an ordinary seller: they evaluated the property based on the realities of the real estate market in the area, put the house up for sale online. When a potential buyer is found, the most interesting thing begins.
As you know, the mortgage imposes strict obligations not only on the implementation of the loan, but also on the disposal of the object. Until the debt is paid fully, the property remains in the status of mortgaged. The originals of the documents are kept by the lender.
You can sell a mortgage apartment if the credit institution has approved it.
Letter of outstanding loan
First of all, the Seller sends an application to the lender (bank) for the issuance of a letter with information about the remaining debt and a list of documents that they need to bring.
A preliminary Purchase and Sale Agreement is drawn up, under which the Buyer must make a payment equal to the amount of the outstanding loan. Accordingly, the Buyer sends a request to the credit institution on their behalf to close the loan.
Day X: sale of real estate with a mortgage
On the day or on the eve of the conclusion of the purchase and sale transaction, a representative of the borrower's bank is invited to the procedure with a banker's draft document, instructions for transferring money to the bank account.
When the money is credited to the lender's account, they issue a "Certificate of absence of loan debts" and give the documents to the Seller. A purchase and sale transaction is being made, backed up by a Contract.
In general, the scheme is simple. After the transaction is approved by the lender, part of the money goes to the bank, part of the money goes to the Seller's account. Thus, the Seller reimburses the invested funds, and otherwise even earns.
If the Buyer is in no hurry to part with their money, they can simply reissue a loan at the same credit institution.
What obstacles can there be when selling property with a mortgage?
Mortgage properties are one of the most reliable, since they have already been checked. During the time when the property was registered to the Seller, they could not give it to someone or partially sell it without the knowledge of the bank. The lender monitors all transactions and carefully protects the legal purity of the transaction. All actions are recorded on the papers.
The disadvantages of buying property with a mortgage include an increase in the period of sale of the apartment due to the reissue of documents.
Unfortunately, it will not be possible to sell such a property in a couple of weeks. And, of course, there are special cases when it is difficult or even impossible to sell real estate with a mortgage. As a rule, this is due to the distribution of property rights, minor children or the specifics of the location of the object.
As you may know, Cyprus banks offer buyers very loyal conditions for obtaining a housing loan.
On average, mortgages are issued in the amount of 60-70%, and sometimes 80% of the cost of housing. At the same time, the average interest rate is 3.5%, and the average loan term is 20 years. Almost every person on the globe with a stable income can use the program. The clients don't even have to be a resident of the country, but in this case they should be ready to contribute more than 50% of the price.
Have you decided to buy an apartment or a house in Cyprus? Contact aDOM! The website offers a huge selection of real estate —residential and commercial. Experienced agency specialists will be happy to help you make the right choice.
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