Your guide to selling a mortgaged house

by Debbie Goldberg 01/07/2024

Selling a mortgaged house is a common real estate transaction. If you want to move out of your home but still have outstanding mortgage payments, you have the option of selling and using the proceeds to cover the amount of your remaining balance.

Are you interested in selling your home with an outstanding mortgage? Here is a quick guide to the basics.

Contact your lender first

One of the first steps to selling a home with a mortgage is to find out how much you still owe. Your mortgage lender can provide you with the amount needed to pay off the loan at a specified deadline in a payoff quote. The amount will include both principal and interest, and a breakdown of any additional fees you might have to pay.

Find your home’s value

There are multiple ways to determine the value of your home. It’s a good idea to work with a real estate agent with extensive experience in your area to help figure out what amount to ask for in the sale.

Knowing your home equity, which is the difference between market value and leftover mortgage balance, is crucial to this process. A real estate agent can help you determine both your earned equity and home investment equity for your property before the sale.

Choose a sale price

The selling price for your home should correspond to market expectations and reflect what buyers would likely pay. However, since the proceeds from the sale will pay off the mortgage and closing costs - including property taxes and any fees to the title company - you want to choose a price that will benefit you.

Your agent can provide a comparative analysis of your home's condition and help you decide on a price. The comparative analysis combines key information, such as sale prices and local trends, for the complete picture of the home.

What is a short sale?

Sometimes, it may be necessary to sell a property for a lower price than your outstanding mortgage balance. This strategy is called a short sale, and must be approved by your lender. However, if you’re facing financial difficulties and in danger of default, short selling is a better alternative to foreclosure.

Many homeowners wish to move out of their home before their final mortgage payment. Luckily, selling your home with a mortgage balance is common practice that any great real estate agent can assist you with.

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About the Author

Debbie Goldberg

I'm a full time Realtor with over 30 years of experience yet young enough to embrace today's ever-changing scope of marketing and technology. Having grown up in Connecticut and moved many times (too many to count!) I can empathize with today's buyers and sellers. Strictly maintaining ethical standards and being a fierce advocate on behalf of my clients are things I take very seriously. As a buyer, you can expect me to listen to and evaluate your real estate wants and needs. I can assist in explaining relevant forms, agreements, and closing procedures. I will guide you through the process of finding the right home, negotiating your offer, adhering to all contract dates and terms as well as final walk through and closing procedures. As a seller, I will listen to and evaluate your goals, needs, and timing in order to properly price your home to get the maximum exposure needed to attract the right buyers. In addition to negotiating on your behalf, I will make sure we communicate throughout the entire process as we navigate the contract terms, finance and inspection contingencies, as well as all closing procedures. I was born in Japan, grew up in Hamden and lived in New York, Ohio and Southern California before settling down in New Haven county to raise two kids, two dogs and a cat. I'm passionate about good food and love to bake. Some of my free time has been spent volunteering at Temple Beth Sholom, a synagogue where my family has been members for over 40 years. I also spend time at Tower One/Tower East, an assisted living center in New Haven where my mother-in-law now resides. 30 years of helping buyers and sellers achieve their goals has given me the peace of mind to know that what I do everyday matters. If you are thinking of buying or selling please keep me in mind.