Paying off a Mortgage? (Questions about early pay off) - The Finance Forums: Financial planning, debt help, loans, mortgages, retirement and 401k, investment, and general finance discussion forums

m4dioses · #1 (**permalink**) 02-21-2008, 02:23 PM

The current balance on my mortgage is 71,845. With 30 year interest it comes out to be 161,765 or so.

Now, my question is if I were to sell the home now for 98,000 which is 12,000 below what it was appraised at (probably end up selling it for even less, actually). What would I owe my lender? My mortgage contract clearly stated no early pay off penalties.

Basically, my question is when I want to buyout of my mortgage do I pay the actual balance or do I pay any sort of interest and other incurred fees(kind of hard to answer without seeing all of the contracts, I'm asking if there's any sort of blanket fees, etc)?

My mortgage is a 30 year fixed, 5.3% interest. The thing is, due to life and family issues I may have to move soon. I have no troubles making payments every month, BUT if I were to move and have to afford the cost of living twice.. then it'd get kind of sticky.

trustedmortgagepro · #2 (**permalink**) 02-25-2008, 12:07 AM

Your payoff would include interest to the day that you payoff your loan. So your balance is not indicative of what the payoff amount would be. Most lenders will give you a payoff statement with a good thru date for a fee of $30-$60 depending on your state and lender.

I recommend you getting one to have for your records. It includes handling fee's to close the account and issue the reconveyance of the lien on your property (usually). Every lender varies in these fee's and other misc. fee's that they can charge for the "paperwork".

Have you thought of holding the property and doing a rental survey to see if you can hold onto this property as an investment piece and have a tenant cover the mortgage for you? Then when the market turns back up you won't take such a big loss and maybe gain some equity in the process in the next couple of years. Most clients fail to see the advantages of this and the benefit. I have been able to make my clients a good net return and sometimes even cash-flow the property. Visit our website if you would like a free "no-hassle" consultation. We would love to show you the options that you have available. Good luck to you!