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There are several reasons that push us to move house, even if we already own one. The freedom to move to a new property is sometimes limited by having an existing mortgage for the first home.
So how can you manage this situation, limiting the costs and related problems?
Moving the mortgage to a new property
What in technical jargon is called "replacement of the guarantee" allows you to move the mortgage to the new property, freeing up the previous property. In this way, when you purchase the new home, the latter will guarantee the financing and you will be able to sell your first home without any mortgage weighing on it.
Short-term bridging loan
To finance the purchase of the new property before selling the first home, it is possible to take out a short-term mortgage (with a maximum duration of 2 years) that covers 60% of the value of the new property, the so-called "bridging loan". This stratagem will allow you to obtain the necessary funds to purchase the new property, without it being considered a second home, given that you have expressed the intention to sell the one you own. Once the first home has been sold, you can then repay the requested loan.
Eliminate the mortgage on the first home
The solution that allows you to be free to sell your first home to purchase a new property without problems is to repay the mortgage early. This can be done before the deed of sale (if you have sufficient funds) or at the same time as the deed, using the proceeds from the sale of the house to pay off the mortgage.
Assigning the mortgage to the new owner
This solution allows you to let the new owner take over the current mortgage on the first home, replacing the previous owner in the payment of the installments. In this way, the old owner will be able to take out a new mortgage to purchase the house.
Or, it can be much easier..
There is another solution, which allows you to sell your house whenever you want and guarantees you liquidity. Instant: this is Casavo, the first instant real estate buyer. If you choose Casavo to sell your home, you'll receive the cash immediately, allowing you to pay off your mortgage and focus on finding your new home. Furthermore, we'll do everything we can to accommodate you on your timeline and allow you to move in only once you've found the perfect home for you!
Request a free valuation of your home now to free yourself from your mortgage and focus on the next step in your life!