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Can a Seller have mortgage on house for sale and sell it for less than they borrowed? |
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Yes. The seller will be required to make up the difference to pay off the mortgage loan. In increasingly rare cases, the existing mortgage can be assumed by the new buyer.
Also with the decreasing home prices, mortgage companies are accepting less than what is owed, the term is called "short sale". But a homeowner should speek to an accountant to find out whether or not they may be liable to pay taxes on the amount of the loan that was forgiven. There has been a new bill signed called "The Mortgage debt relief act of 2007" by Bush recently enabling homeowners for the next three years to be exempted from paying taxes on the forgiven debt. It is in a homeowners best interest to seek an experienced Real Estate agent pr attorney to assist in this matter. A short sale is much more favorable than a foreclosure on one's credit, enabling the possibility of qualifying for a new mortgage.
First answer by Asignia. Last edit by Savemoney101. Contributor trust: 102 [recommend contributor]. Question popularity: 14 [recommend question]
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