We still owe on a first mortgage and we have a HELOC. Can we put our home on the market and use the proceeds to pay off the HELOC? We are pretty sure with the sale we would receive enough to cover both.

Yes. There will have to be a final accounting at the closing to determine how much of the proceeds go to the mortgage and your HELOC to close out both loans.

We still owe on a first mortgage and we have a HELOC. Can we put our home on the market and use the proceeds to pay off the HELOC? We are pretty sure with the sale we would receive enough to cover both.

I don't know if you understand that more than likely the HELOC is secured by your home and therefore a lien would have been recorded. With these type loans, in lieu of the title company, the bank sometimes handles signing documents with the homeowner. Because of this, the homeowner doesn't understand or it isn't explained properly that a lien will be recorded against the home.

When you are in escrow, a title search will take place and any liens against the property will be disclosed. All liens against the property will need to paid off in full at the time of closing from the proceeds due to the Seller. If the proceeds are not enough, then the Seller will need to come up with the additional funds due. Once the HELOC is paid in full, the title insurer will require the Lender to close it out.

Hope this helps you out.