Real Estate

Selling home with HELOC balance?

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  • Jun 21st, 2018 9:30 pm
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Jun 18th, 2018 11:48 am
caddie444 [OP]
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Feb 18, 2013
288 posts
70 upvotes
Scarborough

Jun 18th, 2018 11:48 am

Selling home with HELOC balance?

Is there any issues in selling a home that has a ~100k balance owing for a HELOC? I know the HELOC gets paid off with the proceeds of the home sale, but I've read that a lien has to be put on a house that has a HELOC balance... thanks
8 replies
Jun 18th, 2018 11:54 am
ssj4_ootaku
Sr. Member
May 12, 2003
975 posts
369 upvotes

Jun 18th, 2018 11:54 am

Had no issues when I sold mine with Heloc. The bank sends a payout schedule to lawyer and they follow that.
+1
Jun 18th, 2018 2:58 pm
skeet50
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Jan 15, 2017
5307 posts
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Ottawa

Jun 18th, 2018 2:58 pm

This also means that if you are buying another property and would like a HELOC you will have to apply for it on the new property.
Jun 18th, 2018 4:09 pm
CdnRealEstateGuy
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Feb 2, 2014
10403 posts
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Toronto

Jun 18th, 2018 4:09 pm

caddie444 wrote: ↑ Is there any issues in selling a home that has a ~100k balance owing for a HELOC? I know the HELOC gets paid off with the proceeds of the home sale, but I've read that a lien has to be put on a house that has a HELOC balance... thanks
It's no different than a mortgage. Once you sell the property, sale proceeds are used to payout the balance and then the lien is discharged.
Kevin Somnauth, CFA
Principal Broker/Owner - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
Jun 19th, 2018 11:20 pm
caddie444 [OP]
Member
Feb 18, 2013
288 posts
70 upvotes
Scarborough

Jun 19th, 2018 11:20 pm

Thanks for the replies.

As an aside, is there any advantage to opening HELOC with a big bank whose branch is closer to your house vs one that is farther away? I ask because one bank location that is closest will not budge on set-up fees, while one that is farther away (same big 5 bank) says they will cover the appraisal and legal fees. Any reason to not go with farther branch?

thanks
Jun 21st, 2018 8:21 pm
lawbooth
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Apr 5, 2017
106 posts
111 upvotes

Jun 21st, 2018 8:21 pm

A HELOC is registered against the property as any other mortgage. It is an encumbrance that has to be paid off from the proceeds. The lawyer will obtain a payout statement for 1st mortgage if any and the HELOC. They will then pay it off along with discharge fees and penalties.

Shouldn't be an issue.
+1
Jun 21st, 2018 9:30 pm
cartfan123
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Sep 8, 2007
9461 posts
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Way Out of GTA

Jun 21st, 2018 9:30 pm

Just be aware on the date the lawyer requests the payout statement... access to your HELOC will be restricted from any further withdrawals.

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