Is there a penalty for selling a house too soon?
I bought my house 5 months ago and enjoy it but plan to move and start a new business and don’t want another house. I just want to rent again. I was told that there is a penalty for selling too soon. Is there any truth to this?
Tags: 5 months, new business, truth
September 2nd, 2011 at 2:52 am
Usually there is a pay off fee, unless you signed a contract that didn’t have one. I do have an opinion her, however, beyond your question. My opinion is: DON’T SELL, keep it, you can always get a second mortgage, or a loan on your equity. Keep your house, and just get a loan for your new business. Good luck, Ron
September 2nd, 2011 at 2:52 am
I think you get dinged on your taxes. It depends on your state.
September 2nd, 2011 at 2:52 am
Your mortgage may have a prepayment penalty. Read your note or call the lender.
As for capital gains tax, if you make 250K profit on your primary residence, it will be tax free. However, you will need to live in the property for 24 months out of the last 60. Speak with your CPA, I was able to sell my primary when I lived in it under 24 months and was not taxed for my profits. The pro rated profit is about 10K per month – so in your case you should be able to have 50K UNTAXED in profits, BUT check with your CPA – I had unique circumstances.
Hope this helps and good luck