Selling with an outstanding home loan: what happens to the debt?

# Selling with an outstanding home loan: what happens to the debt? You can consider selling your home before the loan ends, but the sale price is not yet your budget for what comes next. In the usual arrangement described by Fednot, the notary repays the lender from the price on completion of the deed and passes the balance to the sellers after the amounts due have been settled. Establish the bank's settlement figure and the costs of releasing the security before committing that capital again. ## What is the difference between the loan and the mortgage security? The loan is the debt owed to the lender. The outstanding principal indicates how much of the amount borrowed remains to be repaid, not necessarily every sum required to close the file. The mortgage is security over a property. Repaying the debt does not automatically remove its registration. Mortgage release is the deed by which the creditor relinquishes that security; the notary carries out the cancellation formalities. It entails costs linked, among other things, to the mortgage amount, which is distinct from the outstanding principal. [Fednot explains the loan, mortgage release and settlement of the sale price (in French)](https://www.notaire.be/immobilier/acheter-et-vendre-un-bien-immobilier/les-differentes-etapes-dun-achat-immobilier/credit-immobilier/lhypotheque). Show the security deeds to the notary: a registration, a mortgage mandate and an all-sums mortgage do not describe the same situation. Have the requirements of your file clarified rather than deducing the formalities from the name of the loan alone. ## How do you move from the sale price to the available balance? Our method is to reconcile the items before setting the budget for the next project: - a realistic sale price, still provisional until it has been agreed; - the lender's settlement statement for the intended date, including principal, interest and any compensation; - mortgage release costs and the other sale costs payable by you; - other debts or deductions to examine with the notary. Check what each total includes so that you do not deduct an item already accounted for. The notary's settlement statement helps establish the balance; also ask when it can be released. Do not plan your next purchase on the assumption that the entire sale price will first reach your account. To establish a starting value for your home in the Province of Liège, our [property valuation](https://youhome.immo/en/valuation/) page explains the analysis of the home and its market. An estimated value replaces neither the price actually achieved nor the bank's settlement statement. ## Does early repayment involve costs? Early repayment compensation may be provided for. The [FPS Economy describes the conditions for early repayment (in French)](https://economie.fgov.be/fr/themes/services-financiers/credit-hypothecaire/execution-du-contrat-de-credit) and recommends consulting the agreement and the lender for the exact costs. Ask for a detailed settlement statement for your transaction rather than applying a flat amount found online. Gather the agreement, a repayment schedule or recent statement and the security deeds. If the expected price will not cover the debts and costs, have the situation examined before committing yourself. The sale alone does not erase the shortfall: the bank and notary must clarify the possible solution and its cost. ## Can you keep the loan to buy another home? A mortgage transfer may allow you to retain the loan by moving the security to another property. This possibility must be examined with the same bank and the notary, taking the timetable and the properties concerned into account. It is neither automatic nor without costs. [Wikifin presents mortgage transfer and the other options when selling (in French)](https://www.wikifin.be/fr/logement-et-emprunt-hypothecaire/emprunt-hypothecaire/fin-anticipee-de-votre-credit-hypothecaire-0). Compare complete settlement figures: retaining the loan, repayment and new financing. Attractive terms on the existing loan are not enough to guarantee that a scenario will be the most advantageous for you. ## What are the answers to frequently asked questions? ### Is the outstanding principal the only amount to deduct? No. Interest, any compensation, mortgage formalities and other items in the file may be involved. Have the bank's and the notary's settlement statements reconciled. ### Does a repaid loan remove the need for mortgage release? Not automatically. The debt and the mortgage registration are separate. The notary checks which security remains registered and which formalities are necessary for your sale. ### Can you commit the balance to a new purchase now? Do not confuse a provisional balance with available funds. Have the amounts, conditions and release timetable confirmed before making a new commitment. Are you preparing to sell your home? [Request your valuation report](https://youhome.immo/en/valuation/request/) to put its value and your timetable into perspective. The bank and notary remain the people to contact to calculate repayment and the available balance.