Need to sell house but it has a collateral?
I am in process of selling my house but I later found out that my house has a collateral when I took out a personal loan. Can I still sell the house with the collateral even thought the loan has not been paid off yet? I don’t understand why they would put a collateral on my house when it has no equity at all.
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Tags: collateral, personal loan, sell the house
July 4th, 2009 at 5:41 pm
"…they would put a collateral on [your] house…" because you signed the paper that allowed it. You’ll have to pay off that loan as well as the mortgage.
July 4th, 2009 at 5:41 pm
The purchaser will require that the debt be cleared at closing. It should be mentioned in the sale rather than being discovered during title search.
July 4th, 2009 at 5:41 pm
You have a lien on your house because of the personal loan. When you sell it, the mortgage owned on the property plus the personal loan must be paid off and the lien will be lifted. The title must be free and clear at closing to be transferred to the new owner. The title company will handle all of this.
July 4th, 2009 at 5:41 pm
The title company will pick up both loans when they do a title search. No need to advise the buyer as long as you have enough equity to pay it (collateral) off with the proceeds. Buyer have enough to worry about and probably will not understand this anyway.
July 4th, 2009 at 5:41 pm
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