Can You Sell a House with a Mortgage? A Quick Guide

Linda Morrect

can you sell a house with a mortgage

The median price of a home has been increasing over the years, reaching a mind-boggling $500,000 in 2023. Homes have always been big-ticket items, and could have been out of the reach of most people were it not for mortgages.

With a good credit record and a steady income, you can buy your dream home. But a mortgage presents certain challenges, especially if you want to put the house on the market.

So, can you sell a house with a mortgage?

Find out below!

The Ownership of a Mortgaged House

In any free society, you should be able to sell anything that belongs to you. Houses are no different.

However, when it comes to a house on a mortgage, you’re not the sole owner. If you look at the property’s title, you’ll find that it’s registered to both you and your lender.

Although joint ownership doesn’t take away your right to sell the property, it does limit your powers. You cannot wake up one day and decide to sell the house without informing other parties with ownership interest. They must consent to the sale, otherwise the title transfer will be declined.

In many cases, though, a mortgage lender won’t object to a sale, as long as whatever amount you still owe them is cleared.

How to Go About Selling a Home with an Existing Mortgage

The first thing is to establish how much you still owe, and then determine how much the house is worth today.

These two factors can make your job easier or harder.

If, for example, the house is worth less than you owe, it means you must offset the balance out of pocket. If you’re not able to top up the balance, the sale won’t happen.

On the other hand, if the value of the house is a lot more than the remaining mortgage, you’re in luck! From the proceeds of the sale, you’ll clear the loan, pay closing costs, and even bank some home selling profits.

Remember to get a payoff quote from your lender. When you’re paying off a loan earlier, the remaining interest is typically waived. With this quote, you’ll have a clear picture of how much you’ll need to pay the lender.

Working with a real estate agent with experience selling homes with a mortgage is also important. They know the complexities that can arise from such transactions, especially if you’re not selling to a cash buyer.

Cash buyers will hasten the process as they don’t need to get financing from lenders, a process that can take several weeks. What’s more, they don’t care about the state of the house. Any condition is fine.

Can You Sell a House With a Mortgage? Now You Know

So, can you sell a house with a mortgage? Yes.

However, how difficult or easy the process is will depend on the value of the property, the outstanding mortgage principal, and the prevailing marketing conditions in your region. Working with the right real estate professionals also goes a long way. Feel free to leave a comment below and let us know how the sale went

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