Selling a home while still paying off a mortgage can seem complicated, but it’s entirely possible with the right approach. If you’re planning to sell a house that still has a mortgage, you may have questions about how the process works, what costs to expect, and how to maximize your sale price. The good news is that many homeowners successfully sell a house while carrying a mortgage, and you can too with the right strategy.
Understanding Your Mortgage Payoff Amount
Before you list your home, one of the first things to do is determine your mortgage payoff amount. This is the total amount you owe the lender, including any remaining principal and interest. Contact your lender to get an accurate payoff quote. Knowing this number will help you set a realistic asking price when you sell a house and ensure you cover all financial obligations.
Can You Sell for More Than You Owe?
If your home’s market value is higher than your remaining mortgage balance, you can sell a house and walk away with a profit. The difference between your selling price and your mortgage payoff is known as your home equity. The more equity you have, the more profit you’ll make after paying off your mortgage and closing costs.
However, if you owe more than your home is worth, selling can be trickier. In such cases, you might need to negotiate with your lender for a short sale, where the lender agrees to accept less than what is owed. While this isn’t ideal, it can be a way to sell a house if you’re struggling with payments.
Steps to Selling a House with a Mortgage
- Get a Payoff Quote – Contact your lender for an accurate mortgage balance.
- Work with a Real Estate Agent – A professional can help you price your home competitively.
- Set the Right Price – Pricing it correctly ensures a quick and profitable sale.
- Market Your Home Effectively – Professional photos and online listings attract more buyers.
- Negotiate with Buyers – Be prepared to handle offers and counteroffers.
- Close the Sale – Use the proceeds to pay off your mortgage and cover closing costs.
Closing Costs and Other Fees
When you sell a house with a mortgage, you need to account for closing costs. These may include:
- Real estate agent commissions
- Loan payoff fees
- Title transfer fees
- Escrow charges
Typically, closing costs range from 6% to 10% of the home’s sale price. Being aware of these expenses ensures there are no surprises at closing.
What Happens at Closing?
During the closing process, the proceeds from your home sale first go toward paying off your mortgage. Your lender will receive the final amount owed, and any remaining funds will be yours to keep. If you’re using the proceeds to purchase a new home, you can roll them into your next mortgage or use them for a down payment.
Can You Sell a House with a Mortgage and Buy Another at the Same Time?
Yes! Many homeowners sell a house while simultaneously purchasing a new one. This requires careful timing and planning. Some homeowners opt for a contingency clause in their purchase agreement, allowing them to buy a new home only if their current home sells first.
Final Thoughts
Selling a home with a mortgage isn’t as complicated as it seems, especially when you understand the process. With the right strategy, you can successfully sell a house, cover your remaining mortgage balance, and move forward with confidence. If you need expert guidance, SBI Homes can help make the process smooth and stress-free. Reach out to us today to explore your options and maximize your home’s value!
