What happens to my mortgage

What happens to my mortgage - the sale of your home What...

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If you own a home you probably have a mortgage. A mortgage is simply a loan from a bank or financial institution calculated as a proportion of the home’s value. This percentage depends on the type of mortgage you got when you bought the home. LTV stands for Loan to Value and is one of many ratios most lenders use to figure out the risk of lending to you. Your Loan-to-Value Ratio Let’s say you bought your home and qualified for an 80% LTV loan, you put 20% down on the purchase and now after 5 years living in the home it is worth 10% more than when you bought it. Your payments and appreciation have lowered the debt amount to 65% of total market value. When you go to sell your home What happens to my mortgage when I sell my home? The straightforward answer is the lending institution that holds your mortgage note is going to be paid from the proceeds of
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Unformatted text preview: the sale of your home. What happens to my mortgage when I sell my home has more to it. What if you are in a situation like so many where your home is now not only worth less than what you purchased it for, but less than what you owe the lender? Proceeds of Sale This is called a short sale when you sell your home and the lender is set to receive less than they lent you. In this case this lender has to agree to the short sale or accept that you pay the difference out of escrow. It is very difficult to get the bank to approve a loss like this, so most likely you will have to miss many payments before they realize that a short sale would be better than a foreclosure. META description: What Happens To My Mortgage When I Sell My Home? Depending on the situation, your mortgage will be paid off in full or the lender will take a loss....
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