existing mortage question....

we own our coop now and have mortgage balance on it (obviously ) we are now trying to sell our coop and buy an actual house!

my question, is what happens to my old mortgage? does the buyer of my coop pay my mortgage and if there is extra money does that go to me? sorry for the dumb question, i have no clue about all this stuff....where to begin!!!

Re: existing mortage question....

If you're not upside down on your mortgage, meaning you owe more than the co-op is worth, than at closing you will obviously get a check for any money that is left after the mortgage has been satisfied. However, if you sell the co-op for less than you owe on the mortgage then at closing you will owe the bank the difference in order to settle your loan.

The new homeowners will have their own mortgage on the co-op which has nothing to do with you. They will have a mortgage for the agreed upon sale price less any down payment. They don't take over your old mortgage, it doesn't work that way. Hope this helps.

Re: existing mortage question....

We sold our coop and got the check at closing. It was selling price minus what we owed to our mortgage, minus our realtor fees. Kind of a sad check At that point we already had moved into our new house so it was nice not to be paying double mortgage and utilities

Good luck!

Re: existing mortage question....

Have you spoken to a realtor yet? You should have a realtor come in and give you info on the current market for co-ops in your area. They can pull recent comparable sales to give you a rough idea of what you can expect to sell it for. That way, you can figure out whether you will be able to satisfy your mortgage and pay all of the closing costs and fees (realtor service fee, attorney fee, etc.) from the proceeds of your sale.

Also, I am sure you want/need a certain amount to move to your next house (for down payment, moving expenses, etc.).

If you can't satisfy your mortgage with the proceeds, you will be selling at a loss. The question then is - do you have money to bring to the table, or would you need to short sell your co-op (which would probably impede your ability to buy another home for approx 2 years).

Several of my customers in this situation have opted to rent their co-op -- if renting is allowed by the board/by-laws - to cover the cost of keeping the co-op but to avoid a short sale.

If you would like, I would be glad to consult with you -- no pressure or obligation -- to just go over your options with you and provide more info. Please feel free to contact me anytime, even if just to ask questions!