# First time seller question



## Paul77 (Jan 22, 2015)

I'll be selling my home and not purchasing a another right away (moving in with family temporarily).

The mortgage is not paid off, say 200k remaining. Let's guesstimate 250k selling price.

I'm not certain how this works since I won't be porting or getting a new mortgage until a couple of months later.

Does my current mortgage get paid off?
Do I get a check for the balance ? 50k in this scenario
Is there anything else I need to be prepared for?

Thanks


----------



## birdman (Feb 12, 2013)

Yes and Yes. When a purchaser buys your home they pay cash for clear title to the property. To do this the purchaser pays the $250K selling price "in trust" to a lawyer (or notary) who disburses the funds to payout the mortgage(s), pay the realtor commission, with the remainder coming to yourself. Accompanying the funds there will be a letter from the lawyer to yourself outlining the "Statement of Adjustments" to the purchase price. The latter can include prorated taxes, and perhaps other items.
When purchasing a new home later on you will have to go through the mortgage application again. There is always the possibility that the purchaser could assume your existing mortgage. There could be a pre payment penalty on your existing mortgage and this is something you should be aware of. Thats about it.


----------



## Paul77 (Jan 22, 2015)

Thank you for clarifying. I'm not sure to understand this part though;
"There is always the possibility that the purchaser could assume your existing mortgage"


----------



## heyjude (May 16, 2009)

Let me Google that for you....

http://www.fcac-acfc.gc.ca/eng/resources/faqs/answers/Pages/AE404.aspx


----------



## Rusty O'Toole (Feb 1, 2012)

No way to assume a mortgage anymore. The purchaser will arrange their own mortgage. Even if it is at the same bank it will be a new mortgage.

Just hire a good real estate lawyer and let them handle the details. After closing you will get a cheque and a complete accounting.


----------



## janus10 (Nov 7, 2013)

There should be a credit union or bank with a special room. Inside is a luxurious soft bed. They allow you, for a nominal fee, cash that cheque with the balance of the equity minus outstanding mortgage, and let it rain from the ceiling down onto the bed so you can roll around in it.

Safer than taking it home yourself. I get nervous when I have more than a couple of hundred dollars in my wallet.:distress:


----------



## Mortgage u/w (Feb 6, 2014)

Rusty O'Toole said:


> No way to assume a mortgage anymore. The purchaser will arrange their own mortgage. Even if it is at the same bank it will be a new mortgage.
> 
> Just hire a good real estate lawyer and let them handle the details. After closing you will get a cheque and a complete accounting.


Assumptions are still possible, however, complicated and rare nowadays. Only way for someone to assume your mortgage is to qualify and accept the exact loan and terms remaining. They would have to come up with the difference between the loan amount and purchase price from their own savings. Assumptions are very problematic and I do not recommend them when selling a property to a stranger. I would recommend an assumption with its a sale between immediate family members only - but even at that, beware. The problem with assumptions is if not done properly, you remain responsible and are not liberated 100%. So don't go there.


----------



## dougboswell (Oct 25, 2010)

Your net from the proceeds will unfortunately not be $50000. Real estate fees might eat up over $12500 (will be gst added ), lawyer fees which could be $800-$1200 and the penalty to break your mortgage. That amount will depends upon your current rate and how much of the term is left. You can call your mortgage company and they can give you a pretty good idea of the amount that will be owed.


----------



## Homerhomer (Oct 18, 2010)

contact your bank or broker to get the proper answers related to your specific situation, if you are getting a mortgage couple of months later it may be just an issue of porting your existing mortgae, if I am not mistaken many products will allow to port a mortgage within 90 days after selling your first house, but since it may not apply to you better call your bank or broker.


----------

