Can You Sell a Home with a Mortgage?

chofhine • December 11, 2019
Can You Sell a Home with a Mortgage?

To answer the question: yes, you can sell your house while in a mortgage, and it’s quite common. Having a mortgage means you still owe money to your lender and haven’t settled your home loan. With mortgage loans lasting from fifteen-thirty years, usually, homebuyers move more than one time after they purchase a home. See how you can sell your home with a mortgage.

Things to Consider before Selling

If you’re thinking about selling your home, it’s wise to contact your mortgage lender and inquire about the payoff amount. You can usually guarantee that amount for a few weeks to a month before interest accrues, changing the amount. Once you know your outstanding loan balance, it gives you a good idea of what to ask. Moreover, the money from your home sale goes to pay off your remaining loan.

Another thing to consider is the due-on-sale clause in your loan paperwork. This clause protects lenders by guaranteeing they get paid when your home sells or the deed is transferred to someone else. They may need information about your buyer’s mortgage lender, but other than that, they’re not involved. 

Selling Your Home

Your next step includes hiring an agent unless your lender sets you up with a title company. The agent ensures there are no issues with your property’s title, but you need to provide them with your mortgage payoff amount and account number. After signing the documents, you must complete closing, otherwise known as a settlement. This final step includes sending off your last mortgage payment and formally sending the title to the buyer. It usually involves getting all parties together to sign papers and make payments. 

Obstacles You May Encounter

No one wants anything to go wrong when selling their home, but sometimes obstacles occur. A few things that could happen are:

  • The lender requires a prepaid mortgage fee, meaning you’ll need to pay both the penalty and your last mortgage bill. If you have any issue with paying it, talk to your lender for options.
  • If you owe more than your home is appraised at, you may have negative equity. Therefore, you won’t be able to use the proceeds from your home sale to pay off the remainder of your mortgage. If this happens, you may need to postpone your home sale and pay off your loan in full or try and refinance.

Selling your home before you’ve fully paid off your mortgage is possible, depending on your situation. Ensure you’re up-to-date with all your mortgage payments and that you can cover all the closing costs. If you encounter problems, contact your mortgage lender and enlist a lawyer’s help. Hopefully, you won’t face these obstacles, and your home selling experience goes smoothly. 

Contact Utah Sell Now

If you need to sell your home fast in Utah contact us today ! We guarantee no fees, no commissions, and more cash in YOUR pocket. Our commitment includes ensuring a fair price for your home, regardless of condition.

Buying and Selling A Home in South Jordan, UT

By Bateman Team • February 11, 2025
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