America’s Leading Cash Home Buyers

America’s Leading Cash Home Buyers

Last mortgage payment before closing – more help…Is a cash offer lower than what my home is worth?That last mortgage payment before closing the sale of your property can be a bit of an unknown for many house sellers. And Colorado is no different. So here’s what you need to know when it comes to the last payment on your mortgage.

Let’s start with the quick answer, then we’ll get into the details…

The short answer is yes. There is no specific state or federal law that directs this ruling. It comes from the specific mortgage contract that you signed. Until you have handed over the property to someone else and the deed is in their name and you have a document from your lender that your mortgage is paid in full, then you need to make payments. 

For most homeowners, mortgage payments are due on the first of each month. Payments are considered late on the 15th of the month. The title company will order a ‘payoff’ from your mortgage company before closing.

Why is the last mortgage payment an issue?

    Well, even in Colorado, where the housing market can be pretty hot, there are still around 3 months on average of additional mortgage that needs to be paid out.

    This could be longer if you’re not in the hottest market by an additional one to two months, and can even add an additional month of mortgage payments depending on when the cycle date of your mortgage due date is.

    This means that from when you decide to sell your home, to when you have to cease making mortgage payments on it, you might be left reeling with up to five mortgage payments you didn’t factor in.

    It’s better to overpay than underpay

    It’s also possible that you could skip out the last payment …but it isn’t recommended. You could be charged a late fee if the final payment comes in under the amount due – or after the due date.

    It’s better to keep paying – and potentially even overpay your mortgage payments. This is the safest option. At the very least, when all the dust of the sale is over, you will get back any overpayments you’ve made. 

    It can be quite frustrating when selling your home. There can be a lot of upfront costs and fees that you need to payout – and perhaps didn’t anticipate. That’s money, patience, and time that can never be recouped.

    Plus, you still need to keep paying the bills (remember that also includes utilities as well) until you get the official ok from your mortgage provider and notary that you can move on with your life.

    An event that was supposed to leave you with money in your pocket actually puts some additional strain on your wallet, and stress levels, until the whole ordeal is done with.

    Choose the right real estate agent

    Having knowledge of the market you are selling in is imperative to getting the best possible price for your property.

    If you are looking to sell a property that may need some repairs, then choose an appropriate real estate agent that regularly deals with these types of property. Particularly where you can see a track record of where the agent has assisted people previously.

    Agents that deal with properties requiring repair, already carry a competitive advantage in the market and understand how to market properties that may fall short of perfect.

    Expectations

    To give you some idea of expectations, here’s a visual representation of how many mortgage payments may be due before the sale closes, depending on the market demand for property, the average of which dictates the timescale.

    What to do about the last mortgage payment before closing

    Well, the Colorado housing market is pretty hot and competitive, yet there are some signals that things could be shifting in a different direction. Housing markets though, wax and wane all the time.

    The most popular area, Denver, noticed that the number of houses sold was starting to slow down and the pricing wasn’t on par with the meteoric rise the past few years.

    This is mainly due to the results of world events, and the hit that these events have on the economy.

    This could, of course, be a one-off instance, but for those that are considering selling their home, it can take longer to sell your home, meaning more of those mortgage payments.

    The fastest solution

    What can be done is reduce that lag between when you want to sell your home, and when you want to receive the funds.

    This is where you might want to consider an all-cash offer. This is a great way to avoid any mortgagee payments over the ensuing months of the sale, and get the equity from your property into your hands fast without added, and needless expenses.

    By focusing only on those buyers that are offering cash offers, you can end up actually saving a lot of money in the long run, as well as saving time.

    Here’s the same graphic, showing the mortgage payments that could be avoided. And here’s more information on how that works.

    mortgage payment fast sale

    Is a cash offer lower than what my home is worth?

    This is largely dependant on your individual circumstances, but…

    You’re already in a market where home values are increasing over time. So if you’ve had your home for a while now (at least five-plus years), then you’ve already paid a portion of your mortgage off, AND the value of your home has already increased.

    All-cash offer buyers understand this and will help quickly settle on your home based on those market forces.

    The spread between what is owed and the value provides room for negotiation.

    It’s also difficult to put a price on “time” as you cannot buy time back. This means that an all-cash offer will be much faster than someone who will be buying out your home with their own mortgage.

    Avoiding additional fees

    Also, consider all the other fees that might not have to be factored in. There won’t be any real estate fees or any marketing-related fees. There will be reduced utility and other bills from an earlier sale.

    You also do not have to worry about fixing up your home aesthetically, because cash offer buyers are happy to buy the property immediately and “as is”.

    This means you do not have to really be concerned with when your last mortgage payment might be …as you will be going through a much more expedited process.

    You can throw away that spreadsheet that was starting to calculate all the costs associated with selling your valuable property and focus on whatever the next stage of your life might be. 

    All cash offers could be exactly what you might need and what you are looking for as you might be living in an uncertain period of your time.

    You might be considering going into forbearance and an all-cash offer can be an ideal way of resolving that. Or even avoid having to go into foreclosure – where it is almost a guarantee that your home will be sold at cost (of the mortgage) plus a small mark-up fee to recoup costs levied by the mortgage lender.

      Avoid foreclosure

      A foreclosure sale is not really a win for anyone. It’s also an unfortunate ending to all the time and energy you’ve put into your home over time, or costs incurred trying to sell it at a cost due to circumstances out of your control.

      Or potentially you lose out on your hard-fought earnings due to the extension of the process when selling your property. 

      Most people offering all-cash deals will always be an option without any form of obligation, unlike using a real estate agent who finds you a buyer. Here’s how to avoid a foreclosure.

      Last mortgage payment before closing – more help…

      This is how we work, and we provide this service for communities in Denver and across our home state of Colorado. You can easily contact us to ask questions about how this works for your particular circumstance, or just give us a call.

      We’ll discuss your needs, and offer based on the current market forces and whatever helps you walk away with peace of mind.

      If you’re concerned about getting into difficulties regarding your mortgage, then easily take back control. Let us help you to resolve the issue quickly, and move on to better situations.