Can I Sell My House If I Have an Interest-Only Loan?
Several things have changed in the Australian housing market. Australians no longer live in their 30 years on average. Instead, they live in them for an estimated 10 years. Therefore, it makes sense that many Australians seek to sell their house before their mortgage reaches maturity. It’s more true if a homeowner enters into an interest-only mortgage.
Interest-only home loans remain useful for two groups of homebuyers. Investors benefit from the reduced repayments. Homebuyers who don’t qualify for a conventional mortgage remain the other group. Sometimes becoming a homeowner simply requires an individual to get their foot in the door. If they keep up with their repayments, they start to build wealth within the first year.
A $550,000 home loan with a 3% interest rate nets a monthly repayment of $2,318. An interest-only mortgage with the same terms nets a monthly repayment of $1,375. This benefits investors who need to keep their overhead costs low. It also benefits homebuyers seeking to become homeowners.
The interest-only period lasts five or 10 years. Before it expires, the homeowner must take action. Otherwise, the repayments take a significant jump. One action the homeowner and investor can take is to sell the property. Then, use the proceeds to pay off the mortgage.
If the homeowner builds a positive repayment history, they can leverage their position into a new and more favourable mortgage.
Sell My House and Interest-Only Mortgage Conclusion
If you would like to sell my house to pay off an interest-only mortgage, you can. Mortgage House helps homeowners work through the process. Contact our loan specialists today.