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Can you sell a house with a mortgage in Malaysia? The short answer is yes you can sell your house even if you still owe money on the mortgage with the bank. This article will explain the home sale procedure you need to do if your home loan is still not fully paid.
Haven’t Fully Paid Mortgage in Malaysia, Can You Sell Your Home?
As you know, the housing loan period is usually between 30 and 35 years old. However, not all homeowners will live in the house for a long time. Some may want to move due to factors such as buying a larger new home, buying a home near the workplace and so on.
To sell your house with a mortgage in Malaysia, your loan balance needs to be paid in advance and there are a few things you need to know before putting your home in the real estate market.
1. Check the Lock In Period Loan
Your home loan is likely to have a lock in period or a locked period. To your knowledge, the lock period is one of the important clauses of your home loan agreement. You will need to pay a fine or penalty to the bank if you sell your home during this locked period.
Usually, this locked period is around two to five years depending on the terms of the agreement between you and the bank. If you are unsure, you can contact the bank for more information. You need to know this information before selling your home as it includes one of the cost of selling home. What about the penalty rate if your home is still locked? Often the fines charged are between two and five percent of the total loan amount.
2. Signature of Sale and Purchase Agreement
Interested buyers will make two to three percent bookings and eight to nine percent. After that, you as the seller will sign a sale and purchase agreement with the buyer. This agreement will be provided and managed by your property lawyer.
Once the sale and purchase agreement has been signed both parties, the buyer and the seller, the lawyer will submit a debt balance application to the seller’s bank. This is because, the buyer needs a statement of this debt balance required to settle the balance of the home loan.
3. The Buyer’s Bank Will Clear the Balance of the Mortgage
The next unexpected home selling way you need to know is that the banker must make a payment to the seller’s bank. This procedure will settle your debt balance as a seller with the bank who has lending.
For example, you sell your home for RM500,000 to buyers. However, when you check the debt balance statement, you still have a RM300,000 home loan debt. This means that the Bank of the Buyer will need to pay the remaining RM300,000 to your bank.
Once a payment has been made, your bank will submit a grant and all related home documents to the buyer’s lawyer. Using this submitted document, the buyer’s lawyer will make a new mortgage agreement. This process is known as a mortgage or easily redeeming debt.
4. Transfer
The next process is that the lawyer will implement the transfer process and the name of the buyer will be registered as the new homeowner. After that, buyers need to collect home grants to their banks. Home grants need to be fashed to the bank as they need a guarantee that the loan recipient will repay the loan. If the payment is not accepted, the bank may auction the house with a grant as a collateral.
This process is called a discharge of charges or discharge of charge will be carried out by the appointed lawyer. Here are some of the processes involved:
- The lawyer will check the record of the house or real estate.
- You will be asked to submit relevant documents and make sure the document is complete.
- The document signature process for the mortgage release process.
- Submission of the original grant will be from the seller’s bank to the lawyer,
- Transfer duty duty transactions and charges.
- Delivery and Registration of Transfer and Mortgage at the Land Office.
- The lawyer will send a letter of advice to the bank to release a loan (disburse).
5. Receive the Balance of the House Price
The final stage in the way of selling the house is not payable this is that the buyer needs to explain the remaining home price after the debt of the debt. Let’s take back the house for RM500,000 earlier. Let’s say you have explained a RM200,000 housing loan. The lawyer will ask the buyer’s bank to pay the amount and then you will receive this RM200,000.
After all this process is complete, you as the seller will need to submit a key to the buyer. This means that you officially successfully sold your home. Make sure your home is in good condition and has no damage before submitting the house key to the new owner.
Any Other Costs You Need to Know When Selling Your House With Mortgage in Malaysia
In general, there are three payments that you have to explain: Real Estate Tax (CKHT), Agent or Real Estate Agency and Legal Payments. So make sure you finish these costs first once your home selling business is done. Hopefully this article can help you understand how to sell a home that has not yet paid a bank loan.
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