Can you sell your house before paying off the mortgage?  

The ultimate guide

Selling a house is expected as being the owner; you might have to make decisions at least once in life. The reason could be anything from changing city to job relocation. Well, you don’t want to sell at a loss. Therefore, you try every possible way to get the best value from the sale. 
Sellers remain favorable, especially after paying off all their mortgages before selling. That is how they get enough equity to enjoy the purchase of the new home. Moreover, you can use the amount to pay off all the debts and other obligations with closing costs. So, a seller often benefits from positive equity. 
First, you will try to pay the mortgage as early as possible. That will save you money on interest and could even allow you to sell your house for more than the amount you initially borrowed. 
Though selling a house is daunting, a little effort from your side can make things go smoothly. Secondly, you need to get ready to move, i.e., you may pack your belongings, start staging the house, and work on repairs and maintenance to get the potential buyers interested in your property. Finally, take care of business negotiations and closing dates.  

But what if the seller has to sell immediately and cannot wait for the equity to build? Well, there are rare conditions that you may have to face as a seller. If, in any case, you have to sell your house before paying off the mortgage, then you must be thinking if you can do so or not. Meanwhile, other considerations must be kept in mind. 

In case you have to sell your house before paying the mortgage, then keep the following things in mind;

Let your lender know and determine whether they approve this, as some lenders want the total mortgage payment before selling a house. 
Most importantly, you must know the amount of equity you have in the house. This portion of the sale price would pay off the remaining balance on your mortgage.
You must prove the amount of money you will earn from the sale. To assess your home’s current value, you must determine the current market conditions and the demand in the housing market. 
Finally, when you are clear about things. Then is the right time to sell your house before paying off your mortgage. That could be the easiest way to get out of a property that’s not working for you and free up some cash flow. However, its consulting with a qualified real estate professional is essential if you decide to go this route.

Steps to take to sell your house before paying off your mortgage

If someone is struggling to keep up with their mortgage payments, they must take action. There are numerous ways of coping with a failing mortgage, and the earlier you take action, the better it will be for you. 

You can devise a payment schedule, refinance your loan, or even sell your home with your lender. So, the answer is evident you can see a property with a failing mortgage. You have to make timely decisions and deal with the problem. No matter what you do, try not to ignore the problem, as it will only worsen if you miss it. 

Know the amount you still owe. 

You need to know how much you still owe on your mortgage. So, you must account for all the money you still owe. That includes the principal, interest, and any late fees or penalties that may have accrued. You can get advice from a mortgage lender or real estate agent. When you decide to sell your house before paying off the mortgage, this is important to contact the lender. To figure out exactly how much money you still need to pay off before selling your home. 
One of the crucial actions you must perform is charging a reasonable fee. Be sure of the price at which you must sell your house. You are usually required to provide proof to the mortgage company. According to them, the sale price should be 25% higher than the mortgage’s outstanding sum. 

Get an appraisal and make repairs etc.

When you sell your home, the mortgage lender will likely want to know what the property’s value is. Typically, an appraisal becomes necessary. You must complete all the required repairs before deciding to list your home for sale.

Put your house on the market.

You must be aware of the few factors if you consider selling your house. To price your home appropriately and receive the best bargain, first speak with a real estate agent. Second, ensure you have all the necessary paperwork (title deed, tax returns, etc.) since potential buyers want to know about any liens or outstanding mortgages on your property. Finally, be prepared for possible delays while the sale moves through the system – Normally, selling a property might take anywhere between six and nine months.

List your property on various real estate websites

However, some think listing a property on various real estate websites is better. They believe it allows you to sell fast. As more people reach your listed property, you increase the chances of getting more than a single offer. Additionally, it will enable you to be in a better-negotiating position. 
So, you don’t have to negotiate with only one buyer. Moreover, when you list your property on different websites, many people will get the opportunity to receive all the essential information related to your property. So, you need to take every necessary step before selling a house. 

Keep your home in a livable condition

Try to keep your home in a livable condition. Also, check if there is any structural issue, and try to renovate your home perfectly. Otherwise, such problems can hold back potential buyers. 
Whether selling your home with a mortgage or without, you must continually develop the best marketing tactics if you want to buy fast. The potential buyers want to know everything about the house’s condition. Plus, they must know how much it is worth. That is how you would be able to close the deal quickly. Therefore, nobody wants to face unexpected delays in selling a home. Otherwise, delayed processes would only cost you time and money. 

When would be the best time to sell a home before paying off the mortgage?

Generally, sellers try to sell after they have built up equity in their home. Unfortunately, when they are not in an ideal situation, they might decide to sell a house before paying off the mortgage. Selling a house before paying off a mortgage could be the best decision when you cannot pay your monthly mortgages. You may be unable to pay the remaining mortgage payments or be behind on them. So, it is better to sell the house and don’t wait for anything else. 
Likewise, you might consider selling your house if your current income is insufficient to cover mortgage payments. However, the situations vary, and the ultimate decision would always be yours. You, as an individual, can better asses your status and financial position. But, most importantly, it is better to consult a professional and an experienced real estate agent. After all, they know everything well and give you the best possible advice. In the end, it is always worth investigating all of your options. …

What if I fail to pay the mortgage?

It’s crucial to comprehend the risk that comes if you’re thinking of selling your house before you pay off your mortgage.
Selling your home before you have paid off your mortgage can be risky for a few reasons. First, if you do not have enough money saved up for a down payment on another house or if you cannot find a buyer quickly enough, you could lose your home permanently. Second, if there is an emergency where you need to move soon (for example, losing your job), it may be challenging to keep up with paying the mortgage. 

If you fail to pay your mortgage, your lender may begin foreclosure proceedings against you. That means they will attempt to sell your home to recoup the money you owe them. If you are in foreclosure, knowing your rights and options is crucial. Most importantly, the best idea is to sell your house before foreclosure. Then, you can pay the remaining mortgage and closing costs from the amount you gain from the sale. That is how you would be on the safe side, at least. 

Conclusion

Mortgages are a long-time commitment; you typically bound yourself to 20 to 30 years of repayments. At the same time, this could be a terrific way to build equity in your property so that you eventually buy it outright. However, if things don’t go as planned, or you must sell your house without paying off your mortgage, you must assess all the ins and outs of your decision to sell a home. 
As a borrower, you know that debt comes with a lot of responsibility. You must pay the principal and interest amount during the loan period. Indeed, the mortgage is the most significant debt you will ever carry. If you feel you are struggling too much to pay off debt or are worried about loan default, you may consider selling your house or other options. 

Our expertise and knowledge at Selling House can guide you on how to sell a house fast. The real estate agents can also guide you in matters related to selling and buying. We are also here to help you out. 

Latest Blog Posts