Can I Sell My House If I Still Owe Money on It?
Yes. In most cases, you can sell your house even if you still owe money on the mortgage.
In fact, most homeowners who sell their homes still have a mortgage balance that needs to be paid off.
When a house is sold, the mortgage is typically paid from the proceeds of the sale at closing. What matters is how much you owe compared with what the property is worth and what you can realistically sell it for.
If you’re wondering “Can I sell my house if I owe money?”, you’re not alone. Homeowners in Berks County contact us with this question for many different reasons.
Maybe you’re behind on your mortgage. Maybe you need to move. Maybe the house needs too many repairs. Maybe you’re dealing with financial problems, divorce, an inherited property, or another major life change.
Understanding the numbers can help you determine what your options are.
How Does Selling a House With a Mortgage Work?
Having a mortgage doesn’t prevent you from selling your house.
When you sell the property, the money from the sale is generally used to pay off the remaining mortgage balance and other costs associated with the transaction.
For example, imagine:
Your house sells for $250,000.
You still owe:
$150,000 on your mortgage.
There may be other selling expenses, but the mortgage balance would generally be paid from the proceeds at closing.
The amount left after paying the mortgage and other costs is your remaining equity.
What Is Home Equity?
Home equity is the portion of your home’s value that you actually own.
A simple way to think about it is:
Home Value − Mortgage Balance = Approximate Equity
For example:
- Home value: $300,000
- Mortgage balance: $200,000
- Approximate equity: $100,000
The actual amount you receive from a sale can be different because there may be commissions, closing costs, taxes, liens, payoff fees, or other expenses.
But understanding your approximate equity is a good starting point.
What If I Owe More Than My House Is Worth?
This is where things become more complicated.
Suppose your house is worth approximately $200,000, but you owe $225,000 on the mortgage.
You don’t have $25,000 of equity.
Instead, there is a $25,000 gap before considering other selling expenses.
In this situation, simply selling the house for $200,000 may not be enough to pay everything that is owed.
A homeowner may need to discuss options with the mortgage servicer. Depending on the circumstances, a short sale or another solution may be possible.
If you owe more than your home is worth, don’t assume you have no options. But don’t assume a cash buyer can simply make the mortgage balance disappear either.
Your specific financial situation matters.
What If I’m Behind on My Mortgage Payments?
Being behind on your mortgage does not automatically mean you can’t sell your house.
If you have enough equity in the property, selling the house may allow the mortgage to be paid off through the sale.
But timing can become extremely important if you’re already receiving foreclosure-related notices.
If you’re behind on payments, consider talking with your mortgage servicer and a qualified housing counselor so you understand your options and deadlines.
If selling the property is something you’re considering, it’s also important to find out how much the house could realistically sell for and how much you currently owe.
Can I Sell My House If I Owe More Than the House Is Worth?
Possibly, but it is different from a normal sale.
If the expected sale proceeds aren’t enough to pay the mortgage and other required costs, you may need approval from the mortgage lender or servicer before completing the transaction.
This type of transaction may be referred to as a short sale.
A short sale isn’t something you should assume will automatically be approved. The lender’s requirements and your individual circumstances matter.
If you’re in this situation, get professional advice before deciding how to proceed.
What If My House Needs a Lot of Repairs?
This is another common concern.
You may owe money on the house and also have a property that needs thousands of dollars in repairs.
Maybe the house needs:
- A new roof
- Kitchen renovations
- Bathroom updates
- Flooring
- Plumbing repairs
- Electrical work
- HVAC repairs
- Foundation work
- Water damage remediation
- Extensive cleaning or cleanup
You may be thinking:
“I can’t sell this house until I fix everything.”
That’s not necessarily true.
Some buyers purchase houses as-is, meaning the homeowner doesn’t have to complete all of the repairs before selling.
This can be particularly helpful when you don’t have the money, time, or desire to put additional money into a property you’re planning to leave.
Do I Have to Pay Off My Mortgage Before Selling?
Generally, you don’t have to pay off the mortgage out of your own pocket before putting the house on the market.
The mortgage is typically paid off as part of the closing process using the proceeds from the sale.
Your settlement company or closing attorney will obtain the payoff information and account for the amount owed when calculating the transaction.
The important question is whether the expected proceeds from the sale will be enough to cover the mortgage and other required costs.
What If There Are Other Liens on My House?
A mortgage isn’t necessarily the only debt attached to a property.
There could potentially be other liens or obligations, such as:
- Home equity loans
- Lines of credit
- Tax liens
- Judgment liens
- Contractor liens
- Other recorded debts
These can affect how much money you receive from a sale and whether the property can be transferred.
If you’re considering selling and you’re unsure whether there are liens on the property, it’s worth finding out before you get too far into the process.
Can I Sell My House for Cash If I Still Owe on the Mortgage?
Yes, potentially.
Selling your house to a cash buyer doesn’t mean you have to own the property free and clear.
The mortgage can generally be paid from the proceeds at closing, just as it would be in another type of sale.
The key questions are:
What is the property worth?
How much do you owe?
Are there other liens or costs?
Can the property be sold for enough to satisfy the obligations?
Those numbers determine whether a cash sale may be practical.
Why Would Someone Sell a House for Cash Instead of Listing It?
A traditional real estate listing is a great option for many homeowners.
But it isn’t the only way to sell a house.
Some homeowners prefer a direct sale because they don’t want to:
- Make repairs
- Pay for renovations
- Clean out the entire house
- Deal with repeated showings
- Wait months for a buyer
- Worry about buyer financing
- Continue paying property expenses while waiting for a sale
A cash sale can offer a different process and timeline.
It may not be the highest possible price someone could receive through a traditional retail sale, but the homeowner may value speed, convenience, certainty, and selling the property as-is.
What If I Need to Sell Quickly?
There are many reasons a homeowner may need to sell quickly.
You might be:
- Behind on mortgage payments
- Facing foreclosure
- Moving for a job
- Going through a divorce
- Dealing with an inherited property
- Dealing with an unwanted house
- Managing a vacant property
- Dealing with problem tenants
- Facing major property repairs
- Trying to resolve a financial situation
If you need to sell quickly, understanding the property’s value and your mortgage payoff amount should be among your first steps.
How Berks County House Buyers Can Help
At Berks County House Buyers, we purchase houses directly from homeowners throughout Berks County, Pennsylvania.
We’ve been buying houses for more than 12 years and have worked with homeowners in many different situations.
We purchase properties in a wide range of conditions, including houses that need significant repairs.
We can look at your property, consider its condition and circumstances, and determine whether we can make you a cash offer.
There is no obligation to accept an offer.
If selling directly isn’t the best option for your situation, we’ll tell you that too.
What Happens When You Contact Us?
The first step is simply telling us about your property.
We’ll ask some basic questions about the house, including its location, condition, and your situation.
We’ll then look at the property and determine whether we’re interested in purchasing it.
If we are, we’ll make you a cash offer and explain the process.
You can decide whether the offer works for you.
There’s no pressure to accept it.
Watch Our Video
[KEEP THE EXISTING YOUTUBE VIDEO HERE]
Watch the video above to learn more about selling a house when you still owe money on the property.
Frequently Asked Questions
Can I sell my house if I still have a mortgage?
Yes. Having a mortgage does not normally prevent you from selling your house. The remaining mortgage balance is generally paid from the proceeds of the sale at closing.
Can I sell my house if I’m behind on payments?
In many situations, yes. If you have sufficient equity, selling the property may allow the mortgage to be paid off. If foreclosure proceedings have begun, timing and your specific circumstances become particularly important.
What happens to my mortgage when I sell my house?
The mortgage payoff is generally handled as part of the closing process. The amount owed is paid from the sale proceeds, assuming the transaction generates enough funds to satisfy the obligation.
What if I owe more than my house is worth?
If you owe more than the property can reasonably sell for, you may have fewer options. Depending on your circumstances, you may need to discuss a short sale or other alternatives with your mortgage servicer and qualified professionals.
Can I sell my house as-is if I still owe money?
Yes, potentially. Some buyers purchase houses in as-is condition. You don’t necessarily have to renovate a property simply because you still have a mortgage on it.
Can a cash buyer pay off my mortgage?
A cash buyer doesn’t simply assume or erase your mortgage. In a successful sale, the mortgage payoff is generally handled through the closing process using the proceeds from the transaction.
Do I have to fix my house before selling it?
No. Whether you should make repairs depends on your circumstances and the type of sale you’re pursuing. Some cash buyers purchase properties in their current condition.
How do I find out how much I owe on my house?
Contact your mortgage servicer and request a current payoff amount. Your regular mortgage statement may show your principal balance, but the exact payoff amount can include additional interest, fees, or other charges.
Owe Money on Your House? Let’s Look at Your Options.
If you’re wondering whether you can sell your Berks County house even though you still owe money on it, you don’t have to figure everything out before contacting us.
We’ll take a look at the property and explain what we may be able to offer.
Whether your house is updated, outdated, vacant, inherited, tenant-occupied, or in need of major repairs, we’re willing to take a look.
You can then compare our offer with your other options and decide what makes the most sense for you.
Get a Cash Offer for Your Berks County House
We buy houses throughout Berks County, PA, including Reading, Wyomissing, Exeter, West Reading, Sinking Spring, West Lawn, Mohnton, Hamburg, Boyertown, Fleetwood, Kutztown and surrounding communities.
Call 610-816-6205 or fill out the form on this page to get started.