Once your property has gone under contract, a Title Search will be conducted on your property. During the Title Search, any liens on the property will be discovered, which may include first and second mortgages, home equity lines of credit, past child support due, unpaid MVC surcharges, and any other liens placed against the property while you have owned the home. All liens must be satisfied (paid off) at closing. In most cases, the Buyer pays for the TItle Search, but it is the Seller's responsibility to satisfy the liens.

More so, when purchasing a home, your mortgage representative will look at your income to debt ratio. As mortgage companies have adopted much stricter lending policies over the past year, you may need to payoff your credit card debt in order to qualify for a mortgage. These bills can be taken care of during the closing of your current home - you'll just need to discuss this ahead of time with your agent and Closing Agency.

As others have stated, you will have to pay off any debt associated with the house. Although you do not have to be debt free, mortgage companies are going to look at your debt to income ratio. This is to be sure can meet all obligations, including house payments. Contact several reputable companies in your area and they will help you determine the steps you need to take to become qualified.

Hello:

You will definitely have to pay off the home equity loans and anything assosciated with the property. If you net enough profit from the sale of your home and wish to pay off credit cards that is up to you.
Speaking with a mortgage lender will help you to decide the way to go.

Thank you,
Gina Fagnani

Hi Kristin,
You don't need to be debt free; however, you will need to pay off all loans associated with your home...both your mortgage and any equity lines of credit once you sell. This is done at settlement.

As for paying off your credit cards, it depends on your credit scores. I could recommend several trustworthy lenders who can run your credit and let you know if you need to pay off any bills now.

Elisa Dewees
Re/Max Main St. Realty
85-371-5888