I’m embarrassed that I am a full grown adult, and don’t know how this works. I am so ignorant to it, I didn’t even know how to search Google for the question.
Basically, suppose you buy a home for $200,000 on a 30 year mortgage, and 5 years into your purchase, you manage to find a buyer who will pay $280,000. Of course, you did not pay $200,000 yet after only five years, if someone wants to buy your home.
These are optional guiding questions just so you can see how ignorant I am.
1) Do you get a check for the full 280,000 if they are able to pay in cash?
2) If they’re financing for 30 years instead (since they don’t have cash), do you have to wait 30 years to get your full amount of money? Like, does their monthly mortgage payment go to you?
3) Where does the bank come into this? Or can you bypass that?
4) What happens to the money you paid into the home during that 5 years?
In: 5
You get paid the 280000 however out of that you will be paying off the remainder of your mortgage, so if in 5 years you paid say 20k. You would get the 80k more you sold your house for, and with the 200k remaining, you will pay off the remaining 180k of your mortgage, leaving you with that 20k you had paid over 5 years in your pocket. After the sale you come out with 100k total. (All of that is assuming no taxes or reality fees which is highly unlikely)
I believe the bank is going to be involved from day one since you have a mortgage through them, and they need to be involved with large money transfers.
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