At Professional Home Buyers, we buy houses in Wichita, KS, helping homeowners navigate the home-selling process. If you take out a home equity line of credit or loan, you may wonder what happens to it when you sell your house. Can you sell a house with a HELOC or an equity loan?
Professional Home Buyers has years of experience walking people through the process of selling their properties under unique circumstances. Here, we explain how a home equity loan can affect a house sale.
How a Home Equity Loan Affects Selling Your House
A HELOC is a credit line you secure with your home’s equity. A home equity loan allows you to borrow money against the equity you own in your property.
Both options use your house as collateral. Because it functions like a second mortgage, a home equity loan typically has a longer repayment term and a lower interest rate.
Can you sell a house with a HELOC or home equity loan? You can. However, you’d have to pay the remainder of the home equity loan since the house is its collateral.
In many cases, homeowners with home equity loans use the proceeds of the sale to pay off the balance for their primary mortgage and the secondary loan. Can you transfer a home equity loan when selling? Unfortunately, you cannot transfer the loan; you must pay off its outstanding balance at the time of closing.
What To Expect When Selling a House With an Existing Home Equity Loan
When you sell your house, a title company will calculate the proceeds of the sale according to valid home equity loans, closing costs, and the outstanding balance of the primary mortgage. After paying those costs with the proceeds of the house’s sale, you’ll get the remaining profits for your personal use.
The house won’t have a clear title until you pay off the loan in full. Paying the debt means you can be confident in your relocation to a new home.
Potential Complications of Selling a House With a Home Equity Loan
Selling a house with an existing home equity loan comes with its own set of complications, including a reduction in property value. Home values can drop at any time, potentially preventing you from earning a profit from a sale.
You must also consider lender fees. Lenders may charge additional fees and other expenses that increase the cost of the loan.
Sell Your House Fast for Cash
Can you sell a house with a HELOC or home equity loan? Yes, but because the loan is secured against the value of the property, selling your house will result in the balance of the loan becoming due. Paying off a home equity loan when selling the property usually resolves that issue.
If you’re ready to sell your home quickly in Wichita, Kansas, contact Professional Home Buyers. Our sellers purchase houses in as-is condition for fair cash offers without agent fees or hidden costs. Get started on your home sale today by calling (316) 202-1628 to schedule a consultation with Professional Home Buyers.