Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Logistics of paying off balloon mortgage, then selling house 1-2 months later
Old 01-09-2008, 12:39 PM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 5,173
Logistics of paying off balloon mortgage, then selling house 1-2 months later

I have a balloon mortgage loan, comes due in May. I had originally thought I was clever and timed it to expire just after I planned to sell, but I mistimed and want to keep the house until at least mid-June, and of course it could be later until I get a buyer.

No problem on the money front, I've got liquid funds ready to go, earning slightly better than the 4.125% loan rate.

Is there going to be any delay or hassle with getting my title or whatever else I'll need to sell the house a month or two later? Would I be better off just going ahead and paying the balance off now to make sure the paperwork is done?

I got a letter from the mortgage company last year saying they'd be in touch with me as the due date got closer to discuss payment or refinance options, but Citi took over the loan through a merger late last year. I haven't heard anything from them except for the mortgage statement which does show it as a balloon. I'll get ahold of them soon, but don't know how accurate they'll be about telling me how quickly they'll get everything back to me.

Just wondering if anyone has experience in what happens after you pay off a mortgage and how quickly it goes.
__________________

__________________
RunningBum is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-09-2008, 12:52 PM   #2
Full time employment: Posting here.
tightasadrum's Avatar
 
Join Date: Aug 2006
Location: athens
Posts: 802
I recently paid off a balloon loan. It took several weeks to get the final papers showing the loans had been paid. You might be able to expedite the process if you need to. But I don't believe you should have a problem if you pay the balloon in May and put the house on the market in June. I mean realistically how many people are going to walk in the door with cash in hand wanting to close immediately?
__________________

__________________
Can't you see yourself in the nursing home saying, " Darn! Wish I'd spent more time at the office instead of wasting time with family and friends."
tightasadrum is offline   Reply With Quote
Old 01-09-2008, 01:06 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 5,173
I'm not going to put the house on the market in June. I'll probably put it on the market in early/mid April, and not agree to close before June. 60 days is a pretty standard time to close. If someone were to make an offer and say they needed it sooner, I'd have to decide whether it was good enough to move my stuff into storage and find a temporary place to stay. The chances of getting a buyer right away in April is small, but spring is a good time to sell so it could happen.
__________________
RunningBum is offline   Reply With Quote
Old 01-09-2008, 01:17 PM   #4
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
Most often closings on sales are done by title companies and they can confirm that the loan was paid off even if all the paperwork has not yet been processed by the time you sell. Shouldn't be a problem.
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Old 01-09-2008, 04:44 PM   #5
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 16,511
In 2000 I paid off a house mortgage, and although at the time I wasn't planning to sell soon I did want to get the lien release and associated paperwork in hand. A few months before I paid it off the loan had been resold and the new lender was not well organized. If memory serves it took four or five months to get the paperwork in order, and that was only because I kept after them. A few years later when we did sell that house I was happy I'd had the foresight to not just procrastinate on getting the paperwork!

I later heard other horror stories of it taking up to a year to get the lien releases.

Therefore, I recommend that you don't put yourself in a position where someone else's incompetence can mess up your plans. If you can pay it off now, get the releases, and then when you want to sell you won't have that headache to deal with. Now you have the luxury of time. When settlement is looming you don't have that luxury.
__________________
I heard the call to do nothing. So I answered it.
Walt34 is offline   Reply With Quote
Old 01-09-2008, 05:04 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 5,173
I've been thinking about this and since it's been a nagging worry that something will go wrong with not having all of the paperwork by whenever I'm ready to close, I think I'm best off doing it now, as Walt suggests. There's not a lot of difference in the interest I'm earning on the money vs. the loan interest, it's a risk free move to eliminate the debt, and it'll save me some stress. I just put in a call to get a payoff statement.
__________________
RunningBum is offline   Reply With Quote
Old 01-09-2008, 09:22 PM   #7
Recycles dryer sheets
 
Join Date: Aug 2007
Location: Midwest
Posts: 109
I paid off my mortgage early several years ago. It took them 3 months to file the release of lien, and I had to keep after them to get it done.
__________________
Engineering My Finances Blog
EngineeringMyFinances is offline   Reply With Quote
Old 05-21-2008, 01:03 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 5,173
A follow-up on this.

It took me a few tries to get the pay-off information (using their "automated" system got me nothing), and then I dragged my feet a bit because I was thinking it would be best to do this at the end of the month (since that's what the pay-off statement was calculated on), so I didn't get the loan paid off until March 28. It appears that they would've credited back the interest paid on whatever date I actually paid it.

I got my house under contract in late April, with closing scheduled for May 28 (earlier than I had planned), and the escrow officer told me that the loan release had to be filed, or there was no way to close. A faxed copy of the letter wasn't enough. The release had to be filed.

To make a long story short, we were told at least 4 different dates by CitiMortgage that the release had or would be mailed, and whether it was/would be mailed overnight or via regular mail. The weekly call to get status and beg for getting it on the fast track was very frustrating.

It was complicated by the fact that the closing agent somehow missed that the document was actually filed on May 16, so the last and most frustrating call yesterday should have been avoided. I called the county clerk myself and she showed me where to look online, and that it had already been filed.

So it took about a month and a half to get the release of lien filed, and I was probably lucky at that. Don't cut this close if you're in my position, and even if you don't plan to sell right away, make sure that release of lien has been filed so you don't have to deal with this later.
__________________
RunningBum is offline   Reply With Quote
Old 05-28-2008, 08:10 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 5,173
Sold!!
__________________
RunningBum is offline   Reply With Quote
Old 05-29-2008, 12:04 AM   #10
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 16,373
Yay! See, that was easy, wasn't it ?
__________________

__________________
Bestwifeever is offline   Reply With Quote
Reply

Tags
mortgage


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
A new debate on paying off the mortgage (or not). Nords FIRE and Money 87 05-01-2010 08:49 PM
Another paying off the mortgage thread..... nun FIRE and Money 17 12-17-2007 10:51 PM
Paying down mortgage early? jnojr Young Dreamers 38 08-02-2007 01:27 PM
Paying off mortgage with an SPIA donheff Life after FIRE 5 12-19-2006 11:56 AM
Military Pre-Paying Mortgage VANGUARDROI FIRE and Money 10 04-28-2006 09:52 PM

 

 
All times are GMT -6. The time now is 03:36 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.