For most Poles, a mortgage is the only way to finance the purchase of real estate. What to do when we want to change the dream socket for a larger one? How to sell a flat with a loan?


What to do with a mortgaged apartment?

home loan

A mortgage is a long-term commitment. We take it for 20 or 30 years and then pay it back consciously. It may happen, however, that during this time we will have to move, the family will grow or we want to live somewhere else. Some borrowers, as a result of financial problems caused eg by illness or job loss, may also no longer be able to pay off monthly installments.

Fortunately, there are a few ways to “get rid” of a mortgage and legal “escape” from repayment. We can try to transfer the mortgage to another property or sell an apartment with a loan. Regardless of which of these solutions we choose, we should remember that any changes to the contract require the bank’s approval. Hence, the first step to selling a flat charged with credit is to regulate the relationship with the lender.


Which formalities do you have to complete?

Which formalities do you have to complete?

If we want to sell an apartment with a loan, we have to communicate with the bank. The basic documents that we will have to complete include information on the current state of debt and how much credit we have to pay. Thanks to this, we’ll find out how much we will earn from selling the flat after paying off the loan. Data on the amount of debt will also be important for the potential buyer. The document issued by the bank should show consent for the one-time repayment of the entire liability. After such an operation, the bank is obliged to delete the relevant entries from the real estate mortgage. Everyone who is thinking about how to sell a flat with a loan should know that issuing these documents is not free. Fortunately, the fees charged by the bank do not exceed several dozen dollars.


The easiest with cash

money loan

How to sell a flat with a loan? It is best if the potential buyer of the premises charged with credit has cash. We will be able to repay the loan with what we get for the sale. Simple sounds? Unfortunately not entirely. It may turn out that the property has lost its value and we will get less for it than the outstanding amount.

Another difficulty is the early repayment of the loan. Do you think the bank can’t wait until you return the funds it owns? Well, the bank makes money by giving you a loan. He may charge a commission for early repayment. Therefore, before you decide to settle your commitment before the deadline, read the contract. This is where you will find information about whether the earlier repayment is charged with additional costs. These can be so high that selling a flat with a loan will cease to pay.


Mortgage on … a mortgage?

Mortgage on ... a mortgage?

The situation is much more difficult when the future buyer has no cash to buy an apartment. Polish law does not allow for taking a mortgage for a property that is already encumbered with a mortgage. Then the banks must communicate with each other and determine the order of financial operations. If they consider that changes to the contract are against their interests, they will not agree to sell the premises.

However, if the bank agrees to sell the loaned property, we will receive two documents from it. They are necessary to complete the transaction. The first is information on the current state of debt. The second is the promise, ie consent to delete the mortgage from the land and mortgage register. Of course, subject to repayment. Thus, we will “free ourselves” of credit only when we hand over the funds belonging to it to the bank. Then a new buyer of the premises can be entered into the land and mortgage register along with … a new mortgage for “his” bank.


How to sell a flat with a loan? 

house for sale

Can those who took out a loan for an apartment in dollars also sell it? Theoretically yes, however, practically such a transaction is subject to considerable risk. Even if the bank agrees to convert the loan, depending on the amount we took it, we can lose about 100,000 on it dollars. In addition, most banks will not agree to the sale of mortgaged property in a foreign currency. A certain solution is to repay part of the loan and then transfer it to another property. If the person to whom the premises belong accepts this solution, then the bank will evaluate the house that will become a new collateral. The basic condition for such a transaction is that the property cannot be indebted and its value must be greater than the outstanding amount.


Can anyone take over our loan?

Can anyone take over our loan?

An alternative to selling a flat with a dollars mortgage is that the new buyer takes over the loan. Unfortunately, since 2014, banks are required to grant loans only in the currency in which we earn, so we are unlikely to receive permission for such an operation. We can convert the loan, but as we have already mentioned, it does not pay off at all.


Sale or rent?

Sale or rent?

If we don’t know how to sell a flat with a loan, we can rent it. Rising real estate prices may mean that the fees paid by the tenant are sufficient to pay the monthly installment. This solution is recommended to people who bought an apartment located in a larger city, well communicated with its other parts. Attractive location, proximity to universities or service outlets will make finding a tenant much easier than selling a place. Then the fact of renting can be reported to the tax office. Then, after a certain period, save its profits on the income side and … apply for another loan. Obviously, we must have sufficient credit standing for it. We can also try to replace the credited apartment with one that will be more suitable for us. You should also check whether we will be affected by property sales tax.


How to sell a flat with a loan? Summary

How to sell a flat with a loan?  Summary

A flat with a loan can be sold after meeting the bank’s conditions. And you do not have to pay back the entire liability from your own funds at all. An alternative to selling is renting or exchanging premises. We may also consider transferring the loan to another property. However, we should remember that if we divorce and we have established property separation after taking out the loan, we still have to repay it.