Las Vegas Home Sellers: Know Your Mortgage
Selling your Las Vegas home can be a stressful process, especially if you do not understand all of the factors involved in the sale. One step in the process where you could lose money if you don’t know what you are doing is with your mortgage. To help put yourself in the best position, make sure you ask yourself these five questions before listing your Las Vegas home.
Does Your Mortgage Require a Prepayment Penalty?
Depending on when you purchased your Las Vegas home and how soon you are paying off your mortgage balance, you may be required to pay a significant amount of money in the form of a penalty in order to pay off your mortgage early. Your loan paperwork will tell you if you will be paying this penalty and how much you can expect the fee to be. In some cases you will be required to pay six months interest on the remaining balance.
How Soon Will Your Mortgage be Paid Off?
An attorney or escrow will pay off your mortgage in one to two days. At that time you will get a final closing statement and any net proceeds.
How Much Will I Make?
You will want to know how much you will make off the sale of your Las Vegas home. If you are a married couple, you will not be taxed as much as if you were single because of the state and federal capital gains tax. To calculate how much you will make, you can take the sales price and subtract the closing costs and mortgage amount.
When Can I Get Pre-Approved For a New Mortgage?
Once you or a tax advisor has done the calculations for your net proceeds you can use this number to factor into your new mortgage. Many times your net proceeds are used as a down payment. It is important to keep in mind that your net proceeds is a rough calculation.
Can I Afford to Buy Before I Sell?
Depending on the timing of the Las Vegas market in which you are selling in – and the home that you are selling – buying before you sell can be an option for you. In very few cases if a lender believes that your home will sell very quickly because of the market they may exclude the debt you owe on your home when calculating what you will be pre-approved for. If this is not the case for you, your only other option would be if your income could support owning both homes at the same time.
Selling your Las Vegas home can be stressful if you are not properly prepared. Knowing what to expect in regards to your mortgage can help make the transition to looking for – and then moving into – a new home easier for you.