Selling a House With a Mortgage Attached – What to do

Selling a House With a Mortgage Attached - What to do

Picturing yourself in your new home can be exciting, right? The spacious kitchen, the cozy living room, and the scenic view from the master bedroom. But then, reality sets in. You still have a mortgage on your current home, and the thought of selling a house with a mortgage feels like trying to unravel an intricate knot. 

You might ask yourself if you can sell your house with a mortgage attached or what the process entails. Don’t let the hassle dampen your excitement. Selling a home with a mortgage can seem complex, but it doesn’t have to be. 

This article will be your ultimate guide; by the end, you’ll know how to navigate the selling process successfully.

Selling a House with a Mortgage

When considering purchasing a new house, understanding the financial landscape is paramount. Often, homeowners decide to sell while they still have a mortgage. This can be due to various reasons, including the need to relocate or simply desiring a change. 

While the decision to sell might seem daunting, especially when considering a down payment for another home, it’s a common scenario given the typical 15 to 30-year duration of a mortgage.

The first thing to remember is the importance of your credit score. It is pivotal when approaching a mortgage company for a new mortgage. A robust credit score can get you favorable interest rates, saving you significant amounts over the tenure of the loan.

You must recognize your home equity as you navigate the home sale process. Home equity represents the difference between your home’s current market value and what you still owe. This equity can be substantial for many, especially if they’ve lived in their home for several years. 

Some homeowners might have opted for home equity loans or taken a line of credit against this equity. When selling, these amounts would need to be settled.

Now, what if you previously decided to refinance your home? This would have affected the terms of your loan. Refinancing typically means you adjusted the terms to benefit from better interest rates or monthly payments. But knowing where you stand on repayments is essential if you’re considering selling.

Always ensure there are no liens on your property before selling. Liens are claims made by creditors due to unpaid debts, and they must be addressed before a sale can proceed. Ignoring this can be a costly oversight and might even lead to foreclosure, where the mortgage company can reclaim and sell your property if you default on payments. This is an outcome every borrower wants to avoid.

Can You Sell a House With a Mortgage

If you’ve been making monthly payments for several years, you may have built up enough equity to sell your home and make a profit. However, you’ll need to ensure that the sale will cover your outstanding mortgage, or else you’ll be dealing with negative equity.

It’s also worth noting that while it is entirely possible to sell a house with a mortgage, timing your sale is crucial. Ideally, you should aim to sell your home when the housing market favors sellers. 

This factor means a high demand increases the likelihood of receiving a fair listing price or even a cash offer above your asking price. It’s essential to remember that selling a house with a mortgage requires careful planning and execution. 

But with some strategy and the right resources, you can navigate this process successfully. So, if you plan to sell a house fast in Wisconsin, do not let the attached mortgage deter you.

How to Sell a House with a Mortgage

Now that we’ve established that selling a house with a mortgage is possible let’s explore how to go about it. As in any real estate transaction, the process involves several key steps, but don’t worry; we’re here to guide you through each. 

Remaining Loan Balance

The first thing you’ll want to do is find out your remaining loan balance. This amount is what you still owe on your mortgage loan. Contact your mortgage lender or company to get this figure and ask for a mortgage payoff quote. 

This figure might be slightly higher than the balance displayed on your monthly mortgage statement due to interest accrual. Be aware that your payoff amount will change as you make additional mortgage payments and as more interest accrues.

Once you have this number, you’ll be able to calculate your home equity – the difference between the current market value of your home and your remaining loan balance. 

This figure will inform you of how much you could walk away from the sale, after accounting for the mortgage payoff and other costs related to the sale, like closing costs and agent commission. Remember, you want your net proceeds to be a positive figure.

Timing Your Sale

Next, you should consider the timing of your sale. As mentioned, selling your house when the housing market is in the seller’s favor could yield a higher sale price. There are also fees required when selling your home.

Do your research on the local real estate market and consider consulting with a real estate agent or cash home buyers in New Berlin who can provide valuable insights. 

Remember, the goal is to sell your house for a high price to cover your remaining loan balance and leave you with additional cash.

Fair Listing Price

Determining a fair listing price for your home is crucial in selling. You want your asking price to be competitive in your local market, but it also needs to cover your outstanding mortgage and other selling expenses. 

This factor is where the value of your home comes into play. Consider getting your house ready to sell by making necessary repairs or updates, potentially increasing its value.

Consider hiring a professional realtor who knows the ins and outs of your local real estate market. They can perform a comparative market analysis to help you determine a fair listing price for your home based on recent sales of similar homes in your area. 

You can also reach out to companies that buy houses in Milwaukee that may offer a fair cash offer for your property, thus eliminating the need for showings or repairs.

Preparing a House to Sell

One of the first steps in selling your house with a mortgage is to make it as appealing as possible to potential buyers. This process can be done by making necessary repairs, decluttering, and attractively staging your home. The goal here is to boost the market value of your home and attract the highest sale price possible.

Remember, first impressions are vital in the real estate market. If prospective home buyers can imagine living in your home, they will likely make a competitive offer. However, getting your house ready to sell can require considerable time and effort. But don’t worry, we buy houses in Milwaukee, removing the hassle of home preparation from your plate.

Closing Costs

When you sell your house, you’re not just receiving a big check and calling it a day. There are fees and costs associated with the real estate transaction known as closing costs. These can include realtor commissions, title fees, and property taxes. 

Closing costs often come as a surprise to many homeowners. When selling your house, these fees typically amount to 6-10% of the sale price, a figure you’ll want to keep in mind when calculating your net proceeds. A clear picture of these expenses can help you avoid financial surprises and ensure you have enough equity to cover them.

Paying Off the Remaining Mortgage

Once your home sells, your mortgage lender will receive their share of the sale proceeds. In an ideal scenario, the sale price will cover the remaining loan balance and closing costs and leave some profit in your pocket. However, if your outstanding mortgage exceeds the sale price, you’ll have a negative equity situation.

What happens if there’s a shortfall? You’ll have to make up the difference, which could mean dipping into savings or arranging a short sale with your mortgage lender’s approval. The process can be complex and time-consuming, so discussing these possibilities with your real estate agent or a financial advisor in advance is always a good idea.

Selling a house with a mortgage can seem overwhelming, but it can be a manageable process with the proper knowledge and preparation.

How to Sell a House with a Mortgage


Selling a house with a mortgage attached might seem daunting initially, but as you’ve learned, it’s possible and can be a smooth process if done right. You can successfully navigate this journey by understanding your remaining loan balance, timing your sale appropriately, setting a fair listing price, preparing your house for sale, and accounting for closing costs and the mortgage payoff.

But remember, you’re not alone. We at Cream City Home Buyers are here to assist you every step of the way. Whether you’re looking to sell a house fast in Wisconsin or need advice from cash home buyers in New Berlin, we’re here to make the process easier. We aim to provide a hassle-free experience that respects your time and financial needs.

Here’s to the successful sale of your home and the exciting journey toward your new one!

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