How will this work for my home sale?

Question

I will be selling my home for less than what I owe on both my 1st and 2nd mortgage. However, I have the cash available to pay off what will be left due on the 2nd mortgage. When will I need to provide those funds? Do I just bring a cashier's check to the closing? Or does it have to be paid off prior to closing.

Answer 1

Dear Punkin,

                 YOU SHOULD NOT BE GIVING THE 2nd MTG ANY MONEY UNLESS AND UNTIL

1)      The 1st. MTG is fully paid; or

2)      The 1st MTG has agreed in writing to accept less than the full amount owed.

          Stop whatever you are doing to be certain you have competent advice. It makes NO SENSE  to say you are selling for less than your combined mortgages SIMULTANEOUSLY saying you have cash to pay the balance owed the 2nd. MTG. No right minded 1st. MTG is going to accept less than 100% of what is due before the 2nd MTG gets one dime. That is precisely why it is called a First Trust Deed.

         I fear the 2nd MTG holder is trying to take an unfair advantage without the knowledge and consent of the 1st. MTG.

         The second possibility is that the 1st Mtg does not intend upon releasing your liability from your note.

          It can be nasty out there....be wary  

    

Answer 2

The escrow company will work the final numbers and ask you to bring in the amount needed from you in order to close escrow. Until then, continue making payments as you normally do.