Can You Sell a House While Paying Your Mortgage?
Selling a house that still has a mortgage is completely normal. In fact, the vast majority of home sales fall into this category since the average homeowner only stays in their home for 5-7 years. The only extra step when selling a house with a mortgage is obtaining a payoff statement from the lender. The payoff amount is typically done by the title company that is handling the closing. As well as the payoff amount is deducted from the sale proceeds and sent to the lender to satisfy the loan. The seller then receives the remainder after agent fees and other closing costs are deducted.
The only complication that can occur is when a homeowner does not have enough equity in their home and the sale proceeds are not high enough to pay off their lender. If they must sell in this case, the seller must bring a check for the difference to the closing table instead of receiving a check.
Tips to sell a house while paying your mortgage
Calculate the balance you still owe:
If you’ve decided you to sell the house in order to finish paying off your mortgage, obtaining an appraisal should be your top priority. An appraisal will show if the proceeds from the sale of the home will be sufficient to pay off your mortgage in full. Independent surveyors or specialized companies perform valuations. By analyzing the house as well as the land it is on and evaluating the property against others that have previously sold in the neighborhood, they can tell you what kind of price you might expect the property to get. Selling a home as-is prior to paying off the mortgage hinges on your appraisal being high enough and your lender’s acceptance of less than what you owe.
Find a buyer who is willing to pay the remaining balance on your mortgage.
This may be easier said than done. But it is possible to find a buyer who is willing and able to do this. You may want to work with a real estate agent to help you find such a buyer.
Work with your lender to get approval for the sale.
Once you have found a buyer who is willing to pay the remaining balance on your mortgage, you will need to work with your lender to get approval for the sale. This process can be somewhat complicated. So it is important to make sure that you are working with a reputable and experienced lender.
Make sure that all of the necessary paperwork is in order before closing on the sale.
This includes things like getting a home inspection and making sure that all of the necessary repairs have been made. Additionally, you will need to sign all of the necessary paperwork associated with the sale.
Consult with an expert.
Before you make any decisions about selling your house, be sure to consult with a real estate agent or attorney. They can help you understand all of your options and rights. Additionally, they can help you navigate any tricky legal situations that may arise during the sale.
Selling your house while you are still paying off your mortgage is possible. But it does require some planning and effort. Read more here…