Beware of Mortgage Penalties Before Selling

It is important when you are thinking of selling your property to check the conditions of your mortgage. Most sellers assume that they can pay off the remaining principal of their mortgage with the sale proceeds and be done. But this is not the case. 

If you were to only pay off the principle of your mortgage your lender would not get paid the interest on your remaining principal amount. Your mortgage is a legally binding agreement between you and your lender for you to make payments of the principal and interest for the term of the mortgage agreement. Because of this there will be a penalty for ending your mortgage early. Your lender will have included something in the fine print so that they can get either a 3 month interest penalty or an interest rate differential. 

This is why it is important for sellers to understand the penalty fees they may be subject to before selling their property. 

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Janice Burgers

Janice Burgers

CENTURY 21 Miller Real Estate Ltd., Brokerage*
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