Real Estate

Selling home with HELOC balance?

  • Last Updated:
  • Jun 21st, 2018 9:30 pm
[OP]
Member
Feb 18, 2013
288 posts
70 upvotes
Scarborough

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
Sr. Member
May 12, 2003
975 posts
369 upvotes
Had no issues when I sold mine with Heloc. The bank sends a payout schedule to lawyer and they follow that.
Deal Fanatic
Jan 15, 2017
5307 posts
5418 upvotes
Ottawa
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.
Deal Guru
User avatar
Feb 2, 2014
10403 posts
3043 upvotes
Toronto
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
[OP]
Member
Feb 18, 2013
288 posts
70 upvotes
Scarborough
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
Jr. Member
User avatar
Apr 5, 2017
106 posts
111 upvotes
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.
Deal Fanatic
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Sep 8, 2007
9461 posts
11232 upvotes
Way Out of GTA
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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