Selling a House with a Mortgage: Everything You Need to Know

According to the Zillow Group Consumer Housing Trends Report of 2018, 16% of homeowners live in their house for 3 years or less. And, the typical seller only lives in their home for a total of about thirteen years.

Since most home mortgages usually have a repayment period of fifteen or thirty years, there is a good chance that many of these sellers are selling a house with a mortgage. But, if you’ve never sold a home before or never sold a home with a loan that isn’t yet paid off, you may have unanswered questions about the selling process.

If you’re ready to sell your house and still owe a mortgage, read on to learn what you need to know!

Important Tips for Selling a House with a Mortgage

Before you sell your home, there are some important tips that can help you through the process. Here is some advice for motivated sellers who still hold a mortgage on their homes.

1. Contact the Mortgage Company

Think you want to sell your home?

The first thing that you should do is contact your mortgage lender and ask them for a payoff amount. This is the amount that is needed to pay your loan in full.

The payoff amount that your lender provides is usually good for a period ranging from 10 to 30 days, so if it takes you longer to sell your home, you might notice a slight difference in the amount that’s initially quoted to you.

2. Set a Reasonable Sale Price

Once you have determined how much is needed to pay off your mortgage, you should set a reasonable price for the sale of your home. Be aware that many sellers will want to negotiate a lower selling price than the price you initially list. So, if possible, leave yourself some wiggle room to make adjustments if necessary.

Other than the amount you owe, you should also consider your home’s market value, including the amount that other homes in the area have recently sold for.

3. Consider Possible Setbacks

When selling a home, there are many possible setbacks that can delay the process or cause it to derail altogether.

For example, the home inspection must be acceptable to potential buyers, the buyer’s financing must go through, or the buyer could even change their mind and revoke their contract offer.

One thing that you can do to prevent setbacks from occurring is to require that potential buyers get pre-qualified for the purchase of your home. Some mortgage companies might even require a pre-qualification or proof of income prior to approving the sale.

You should also be prepared to move. Although you might think that this piece of advice goes without saying, that’s not always the case. If you are planning to move to a new area, make sure that you have visited the area and have arrangements in place prior to the closing date.

4. Pay off Your Mortgage

When you sell a home that has a mortgage, you should know that you are still responsible for paying off the amount you owe on your home loan.

Your lender can help to guide you through the appropriate steps for paying off your loan. You should make sure that you talk it over with the lending company prior to the sale of your home. Then, you should subtract the amount you owe from whatever amount you plan to collect from the sale.

5. How Fast Do You Want to Sell?

If you’re a motivated seller looking to sell your home in a short period of time, you may want to consider alternatives other than placing your home on the market and waiting for a qualified buyer to come through.

You may have more luck selling your home for fast cash if you want to sell quickly or if you know that your home has issues that might prevent it from passing a home inspection.

Some companies will buy a home “as-is” and offer an immediate cash price, regardless of its current condition, to motivated sellers.

This option can be especially useful to homeowners looking to relocate asap, those who might be facing foreclosure, or anyone who is selling a home they’ve recently inherited through the loss of a family member or otherwise.

6. Moving Forward

When you communicate with your lender properly through the process of selling your home, the good news is that they are more likely to be willing to offer you another loan for the purchase of a new home.

But, whether or not you choose to stick with your current lender, you should make sure you have covered all of the bases and paid off any amount you owe on your past mortgage.

While choosing a location for your new home, you can expedite the process by ensuring that you pre-qualify for a home loan. This will help you to know if you are able to buy a new home, and it will also give you an idea of how much money you are qualified to spend on the purchase.

Ready to Sell Your Home Now?

Selling a house with a mortgage isn’t uncommon. In fact, it happens all the time.

If you’ve decided that you’re ready to sell your home and don’t want to deal with the time and effort of selling through a realtor, passing a home inspection, or making needed improvements, we can help.

We specialize in buying homes in any condition. And, we are willing to pay you quick cash on-the-spot, so you don’t have to worry about financing or other concerns. The process is quick and painless and helps you get rid of a property that you no longer want as fast as possible.

Check out our website today to get a cash offer for your house immediately!

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