Sale of an apartment with a loan and mortgage – procedure

January 17, 2019 Buying an apartment is not always a lifetime decision. What if we have to move and we took an apartment with a loan? Mortgage is not a limitation! It is possible to sell an apartment with a loan. How to sell a flat with a mortgage? Are there other solutions? We check and guide you through the procedure of selling an apartment with a mortgage loan step by step! 

Can I sell a flat with a loan?

Can I sell a flat with a loan?

When we want to buy an apartment, and we do not have the appropriate funds, we take a mortgage. It is used to finance our housing plans and, unlike cash loans, is a cheaper undertaking. Especially when we choose from among the cheapest mortgage offers, keep in mind that we will repay it for up to 35 years.

What to do when we took out a loan and our housing plans changed? Life is unpredictable. Can I sell a flat with a loan? Yes! It is possible to sell a flat with a mortgage. We check how to do it especially for our readers.

Selling an apartment with a mortgage step by step

Selling an apartment with a mortgage step by step

Mortgage is not an obstacle to selling an apartment. Although the bank secures its interests with an entry in the land and mortgage register, the buyer is the owner of the apartment and can freely dispose of it.
How to sell a flat with a mortgage?

  1. Get a certificate from your bank where you signed the mortgage contract about your current housing loan debt, including interest.
  2. Post a flat sale advertisement. You can use the services of a real estate agency or place an ad on the internet and in the press on your own. Please note that the sale concerns a flat with a mortgage!
  3. After finding a person interested in buying an apartment from the secondary market, write a preliminary contract for the sale of real estate (both if you sell the apartment for cash, as well as when the buyer takes a loan – then the bank requires a preliminary contract). For the security of both parties to the transaction, the contract should be in the form of a notarial deed. The agreement must include a provision on the division of the amount obtained from the sale of real estate into two tranches. The first one goes to the bank (mortgage creditor) account. The second, which is the difference between the flat’s sale price and the loan being repaid, is sent to the seller’s account. Who pays for a notary public? The tax falls on who buys the property. Other notary costs, according to the Law on Notarial Services of February 14, 1991, as amended, should be shared equally between the seller and the buyer. However, this is not a warrant.
  4. Apply to the court to remove the mortgage from the land and mortgage register. Who applies for the mortgage to be removed from the land and mortgage register? The creditor (bank), owner of the property or the person on whose behalf the entry is to be made. We prepare the application on the official KW-ENTRY form, enclosing the bank’s statement on loan repayment and proof of payment of the court fee for removal from the mortgage.

Following the procedure indicated, we should not have any problems selling the flat with credit. What documents should I prepare to sell a flat efficiently?

Documents needed to sell a flat with a mortgage

Documents needed to sell a flat with a mortgage

The sale of an apartment with a mortgage is basically no different from the sale of an apartment that is not charged with a loan. The most important difference is the need to provide a certificate on the amount of debt (the first step of selling an apartment with a loan). By the way, we’ll find out how much we will earn from selling the apartment!
The document should contain the following information:

  • the amount of debt, including interest, commissions and other charges,
  • borrower’s details
  • account number to which the buyer will transfer, which is the difference between the flat sale price and the loan being repaid,
  • credit granting date and debt repayment date,
  • the bank’s consent for one-time repayment of receivables,
  • bank statement on consent to delete the mortgage immediately after settling the debt (so-called promise, bank promise, which is valid for 30 days).

Remember that this certificate is not the only necessary document needed to sell the apartment. A document confirming the purchase of the property is also required. In addition, it is advisable, although not mandatory, to certify that there is no arrears in rent and a certificate confirming that no one is registered in the apartment being sold.

Sale of an apartment with a loan – the amount of commission

Sale of an apartment with a loan - the amount of commission

There are three ways to sell a mortgage flat. Purchase of mortgaged property using a mortgage is not the only solution – but we also mention it here! Let’s check how you can sell the premises before the loan is due.

1. Early repayment of the mortgage – the borrower can make early repayment of the debt using his own funds, freeing himself from any obligations towards the bank. Is it worth it? Often, early loan repayment involves additional fees. Let’s find out what it looks like in individual banks. We check 10 banks!

2. Loan for an apartment with a mortgage – is associated with a longer wait for money and more formalities (as we mentioned in the previous paragraphs) and is based on a notarial agreement.

3. Selling an apartment for cash – no risk of the bank rejecting the buyer’s loan application. When the buyer of the premises pays the amount resulting from the bank’s certificate, he transfers the rest of the money to the seller. If the buyer transfers the entire amount to the seller, he must pay the mortgage.

How to sell an apartment with a franc mortgage?

If the loan for an apartment was in a foreign currency, the bank usually allows a currency conversion by allowing one-off and early repayment. In this case, it is best to go to a financial advisor and determine what date will be most appropriate to make such a transaction. By the word “appropriate” we mean the most favorable exchange rate of a given currency relative to the zloty, which will allow you to get a lower amount of debt.

Transferring a mortgage to another property

Transferring a mortgage to another property

If we want to change the flat, we can also use another solution, which is the transfer of the mortgage to another property.
Conditions for transferring the mortgage to another property:

  • the price of a new flat cannot be lower than the value of the current flat,
  • the new property cannot be encumbered with a mortgage, rights to third parties or debts,
  • submission of the property appraisal report and excerpt from the land and mortgage register.

If we decide to change the mortgage security, let’s go to the selected bank and ask for the exact procedure. After submitting all the documents, the banking institution will assess whether we will be able to transfer the mortgage to another property.

Remember that a new apartment may need renovation. In this situation, it is worth using the ranking of cash loans and obtain funds for refreshing the walls or buying equipment. Only well-decorated interiors allow us to feel comfortable.

Therefore, if it turns out that we have to part with arranged interiors due to receiving a better job in the city at the other end of Poland or enlarging the family – let’s not be afraid of change. Selling an apartment with a loan and buying a new one is not a problem! There are many solutions available that we can use according to our needs.

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