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Can You Sell A House With A Mortgage?

There's no doubt that a mortgage can be a huge financial commitment. But what happens if you want to sell your house fast before you've finished paying it off? Can you still get rid of the property, or do you have to wait until the mortgage is fully paid off? Here's a look at your options when you want to sell a house with a mortgage.

Sell A house With A Mortgage

Can You Sell A House With A Mortgage?

Simply put, yes, you can sell a house with a mortgage!  However, there are some things to keep in mind. First of all, if you sell a house with a mortgage, you'll need to pay off the mortgage plus any fees before receiving your share of the sale proceeds.  Also, the buyer may want to take out their own mortgage on the property. Generally, this isn't an issue as long as you're okay with it and you still get your money in a reasonable time frame.

So can you sell a house with a mortgage? Kind of - but be sure you know what could happen before taking any steps.

How Do You Sell A House With A Mortgage?

If you, like most people, still have a mortgage balance on your house there are some steps you will need to take in order to sell a house with a mortgage.

Order A Payoff

The first step to selling a property with a mortgage is to order a payoff. This is a statement from the lender that shows exactly what you owe on your mortgage. Reach out to the lender and get an official payoff letter stating exactly how much you owe. Payoff letters will always have an "expiration date". Remember every day your mortgage balance is going down. You will probably have to order a second payoff before closing because of this unless you end up selling to a cash home buyer who can close fast. You can learn more about that in our other article, "How To Sell Your House In a Week


Find Out What Your Home is Worth

The next step in selling your house with a mortgage is to know what your home is worth. A tool like Zillow can be an OK start. Remember, Zillows Zestimate, is only an estimate. They may be missing information such as condition, layout, and any additions you may have made to your property. If you want to really know what your home is worth consider getting an appraisal or CMA.  This way you can know what someone is willing to pay for your house before putting it on the market.

Knowing what your home is worth is vitally important. If your house is underwater you will have some issues selling it the traditional way. We will briefly discuss some of those below. if you want more information about selling your house that's underwater check out our blog post "How To Sell Your House In Foreclosure Even If You Owe Too Much

If your home is worth more than what you owe you can proceed to the next step. Do some research on how much it will cost you to sell a house. Just because your house is worth more than your mortgage does not mean you are in the clear yet. Unexpected closing, selling costs, low appraisals, and tax prorations can kill your home sale!

Sell Your House

Now that you know what your house is worth it's time to sell it.  You can do it the old fashion way and put your house on the market. You could also list with a realtor, but you will pay a commission on top of everything else.

You could always try to sell your house on your own, but this is riskier. There are many stories of people using sites like Craigslist or Facebook Marketplace that end up in scams or frauds. You will be taking on all liability when selling a home yourself. If something happens while selling a home without an agent it may not be covered by insurance. So make sure you understand what you're getting into before trying to sell a house yourself. So if you do decide to sell a house without a Realtor, make sure you know what you are doing. Check out our other blog post "How to Sell Your House Faster" for some tips and insights on how to sell your house. 


Collect Your Net Profits

After closing on your home you will get a check for any profits. If your house was worth more than what you owe, congratulations, you got equity!

If the lender did not agree with the appraisal or if it is underwater you will have to send them a check for any difference between what they are owed and what the property is actually worth. You may also owe some interest and fees back to the bank that could total several thousand dollars.

What If You Owe More On Your Mortgage Than What Your House Is Worth?

What happens if you owe more than your house is worth? Can you still sell it? Yes, you still can!  If you owe more than your house is worth you can still sell it whomever it will take a bit more work. We are going to go over a few ways quickly. If you want more information on any of these contact us or read our blog post, How To Sell Your House In Foreclosure Even If You Owe Too Much.


Rent It Out

If you can rent it out, go for it! The best thing about renting is that the bank doesn't care. You will still own the house and they won't ask you to pay any extra fees like taxes after closing. Rents are also tax-deductible, so make sure you save your receipts! If you do decide to keep it as a rental make certain to budget for expenses such as repairs, vacancy, management, and evictions.


Short Sale

A short sale is when you sell your house for less than what you owe the bank. Most lenders will only agree to a short sale if it is in their best interest. . A short sale can be risky, especially if your lender does not approve of the price. If they don't think the price is fair they may decline or ask for all cash just to keep their losses down. You will need a real estate agent and a great short-sale attorney to do this. There are many times a bank will decline a short sale and this will damage your credit, so this should be a last plan of action.



If you can afford to keep the house and you owe too much you can always let the bank take it back (not advisable). If you do not want the house anymore and it's underwater, let them take it back. This is great if you don't care about the money because they will resell it for much less than what you owe. You can also choose to do a deed in lieu of foreclosure which means you sign over the title to the bank instead of letting them foreclose on your house. On top of that, banks may waive some fees since they are getting all their money anyways.


Subject To

This is a great way to get out of your underwater mortgage without damaging your credit and without dealing with the bank, selling your property subject to the existing mortgage. The mortgage stays in place and the new owner takes on the responsibility for the property and the payments.

In Conclusion: Can You Sell A House With A Mortgage?

So, can you sell a house with a mortgage? Technically, yes. However, it’s not as simple as just putting your home on the market and waiting for it to sell. There are a few things you need to do in order to make the process go more smoothly and ensure that you get the best price possible for your home. If you want to sell your house fast and still have an existing mortgage, contact us. We buy houses fast – often in as little as seven days – and we’re happy to work with homeowners who still have mortgages on their properties.

Contact Us Today To Sell A House With A Mortgage