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If you buy a house and it doubles in value does that mean you are mortgage free?
But If you refinance it will half your mortgage right?
- ?Lv 72 months ago
Of course not. The hypothetical value of your property is irrelevant unless you actually sell it.
A mortgage is debt to a bank which loaned you money to buy a house. You have to pay back the amount of money you borrowed. Refinancing might change the interest rate or let you borrow more, but it doesn't make your debt magically vanish.
You borrow $100,000 and use it to buy a house. You later sell the house for $200,000. You pay back the money you borrowed. You get to keep the other $100,000, but you no longer own a house.
- garryLv 62 months ago
it means you move out and sell the property and pay off the loan , simple as that become homeless and out of debt ..
- LLv 52 months ago
NO. A mortgage is a mortgage and it must be paid in full............no matter what the value of a house is. If you refinance, at a higher value - then you just owe more money. It's better to pay off your current mortgage.
- Ron AkiaLv 72 months ago
You are never mortgage-free until you've made the last payment and owe nothing further on the house. However, if you purchased a home for $150,000 years ago and it's now worth $325,000 with a balance of perhaps $80,000, you've got $245,000 equity in the house which is yours should you sell it (less the selling costs of course).
- Christin KLv 72 months ago
No you aren't mortgage free. You still have to PAY your mortgage--the one you originally got. The value of a house has nothing to do with that. You can refinance, but then you'll have a DIFFERENT loan to pay. Are you really that dumb?
The only way to get rid of your mortgage is to pay it.
- 2 months ago
Only if you sell
- JudyLv 72 months ago
Of course not. You still owe the mortgage.
- 2 months ago
Only if you sell it. If you still live in it you will owe the mortgage for as many years as you took that loan out for.
- ANDRE LLv 72 months ago
If your mortgage was for, say, $250,000, and somehow the house value goes up to $500,000, then you have an equity of $250,000 and a DEBT of $250,000.
- dewcoonsLv 72 months ago
No. You still have to pay back the money you borrowed for the house. It just means that when you sell the house you may get twice the money from the sale that you brought the house for.