Clearing a mortgage after one year

Cona

Hi folks
Could someone please explain the process to me regarding clearing off my mortgage?

Situation is, I am one year into a mortgage of 222000€. I am on a variable rate of 3.5%.

I would like to sell the house and use the money to clear off the mortgage. How do I determine how much I owe the bank in interest?

Is there a calculator to help work this out?

myshirt

Are you paid up to date?

Water John

It's also quite simple that the bank won't let you sell unless the price clears all debt.

ForestFire

Squall Leonhart wrote: »

Working on an assumption of a 20 year mortgage, you'd owe the bank in the region of 300-305K for your borrowed 220K.

It'd be about 350K if you had it over 30 years.

As you can see, the value of house would have to have risen substantially over the past 12 months if you're to clear the debt you owe the bank from your mortgage agreement using proceeds of a sale.

But he doesn't owe the bank interest for 20 or 30 years? He only Owes the interest for the year he has had the mortgage. If he is up to date with payments then he has payed all interested owed.

If he is on a variable rate then there should be no penalty for paying up, same as if he switched banks, or am I missing something

Geuze

Cona wrote: »

Hi folks
Could someone please explain the process to me regarding clearing off my mortgage?

Situation is, I am one year into a mortgage of 222000€. I am on a variable rate of 3.5%.

I would like to sell the house and use the money to clear off the mortgage. How do I determine how much I owe the bank in interest?

Is there a calculator to help work this out?

Your original balance was 222k.

You have made 12 payments of (capital + interest).

One year into the mortgage you plan to sell house and repay debt.

You don't say the term of your mortgage.

I would guess the remaining balance after 12 repayments might be 215k approx?

You won't "owe" any interest, as you pay that each month, in your repayment.

You would owe the capital balance outstanding.

Check your mortgage statement.

Iamhere

Ask your bank for the mortgage redemption figure

Kaizersoze81

The financial ignorance of some people is frightening. How could he possibly be liable for the entire terms interest. If your sale price is greater than the amount left on your mortgage then there should be no problem.

lotmc

Cona wrote: »

Hi folks
Could someone please explain the process to me regarding clearing off my mortgage?

Situation is, I am one year into a mortgage of 222000€. I am on a variable rate of 3.5%.

I would like to sell the house and use the money to clear off the mortgage. How do I determine how much I owe the bank in interest?

Is there a calculator to help work this out?

The balance will be only slightly less than the €220k that you borrowed as most of your repayments cover interest in the first few years.

It will not be more than €220k unless you have arrears.

It is a very simple process, and a phone call to the mortgage department of your lender will give you the figure.

Ignore the response that says the balance will have increased - that advice is 100% wrong!

Nervous Wreck

Geuze wrote: »

Your original balance was 222k.

You have made 12 payments of (capital + interest).

One year into the mortgage you plan to sell house and repay debt.

You don't say the term of your mortgage.

I would guess the remaining balance after 12 repayments might be 215k approx?

You won't "owe" any interest, as you pay that each month, in your repayment.

You would owe the capital balance outstanding.

Check your mortgage statement.

This. But also,call your bank tomorrow. They should be able to offer you an exact redemption figure. Nb. they mightn't be able to give it to you over the phone as call centre staff probably don't deal in such detail with mortgages but they'll likely arrange a call back or letter to give you the exact figure.

Cona

Perfect folks. I was slightly confused as to how much interest I would owe (I was worried I'd owe the full 35 yrs interest). I'm currently on a 35yr mortgage but as others have clarified this will not matter.

Thanks!

Trish56

Your first year's interest would be included in your monthly repayments and as you are on a variable rate of interest you can redeem your mortgage at any stage without penalty. If you borrowed 222k over 35 years at 3.50% you would have made 12 monthly payments of €996.88 = €11,962 for 1st year and €7770 would be interest so you would have paid approx. €4200 off the principal leaving approx. €217,800 o/s on the mortgage. If you are selling you need to contact Auctioneer put property up for sale, when sale agreed contact your Solicitor and just before the sale is going to close your Solicitor will request redemption figures from your lender and will clear mortgage the day of closing and will transfer the balance of sale price to you less fees. In the meantime you can ring your lender and request redemption figures which will be posted out to you within a few days.

Cona wrote: »

Hi folks
Could someone please explain the process to me regarding clearing off my mortgage?

Situation is, I am one year into a mortgage of 222000€. I am on a variable rate of 3.5%.

I would like to sell the house and use the money to clear off the mortgage. How do I determine how much I owe the bank in interest?

Is there a calculator to help work this out?

lawred2

ForestFire wrote: »

But he doesn't owe the bank interest for 20 or 30 years? He only Owes the interest for the year he has had the mortgage. If he is up to date with payments then he has payed all interested owed.

If he is on a variable rate then there should be no penalty for paying up, same as if he switched banks, or am I missing something

where did that post you quoted go?

It was the mostly outrageously bad advice I've ever read anywhere

Water John

Don't see anyone saying he owed 25 years interest. The OP had not indicated in his first post as to whether he had made payments to date. That is when I posted that his sale would have to clear the debt. That still holds. Doubt if the house went down in value.
Obviously, some situation has arisen and unfortunately OP will have conveyancing, EA costs plus stamp duty again, so soon after buying.

Trish56

Water John wrote: »

Don't see anyone saying he owed 25 years interest. The OP had not indicated in his first post as to whether he had made payments to date. That is when I posted that his sale would have to clear the debt. That still holds. Doubt if the house went down in value.
Obviously, some situation has arisen and unfortunately OP will have conveyancing, EA costs plus stamp duty again, so soon after buying.

Refer to post no. 4 which quoted a post since removed that advised she would have to pay interest for the 35 years.