When purchasing a second-hand home where the seller has an existing mortgage, buyers must prioritize verifying the mortgage status, securing financing, and ensuring a smooth transfer. First, confirm the mortgage details through a title search and contact the seller’s lender to verify the outstanding balance and payment history. Include a mortgage contingency clause in the offer to protect against financing delays. Second, coordinate with the seller’s lender to accelerate the payoff process, as the buyer cannot close until the seller’s mortgage is satisfied. Finally, hire a real estate attorney or title company to review all documents and ensure compliance with local regulations.

This process is critical because sellers with mortgages often face stricter timelines and financial constraints, increasing the risk of deal breakdowns. According to the National Association of Realtors (NAR), 25% of homebuyers encountered financing issues in 2023, highlighting the need for proactive verification. Additionally, the American Title Association reports that 30% of title disputes stem from unresolved mortgages, emphasizing the necessity of thorough title searches. Securing pre-approval from the buyer’s lender early reduces uncertainty, as shown by a 2022 Federal Housing Finance Agency study linking pre-approval to a 40% faster closing rate. Without these steps, buyers risk extended delays, higher costs, or even lost opportunities due to unaddressed mortgage liabilities.