Can You Sell a House With a Mortgage in 2023?


When it comes to selling your home with a mortgage still not paid off, there can be a lot of confusion and uncertainty. Can you sell a house with a mortgage? How can you go about it? What are the steps involved? What are the potential roadblocks?

In this article, we’ll answer all your questions and help clear up some of the misconceptions about whether you can sell your house with a mortgage.

Keep reading for more information!

Can You Sell a House With a Mortgage?

The answer to this question is yes, you can sell your house with a mortgage. In fact, many people do it every day.

Homes are frequently sold before the mortgage is entirely paid off. The remaining balance of the mortgage should be paid off by the sale of the house, and ideally, you’ll have enough money left over to put a down payment on your next property.

You should have no trouble selling your house, paying off your mortgage, and moving on to a new home and mortgage as long as the analysis of the real estate market shows it’s been reasonably steady since you bought your house and you’ve maintained the property in good condition.

Thus, selling a house with a mortgage is totally fine, but the situation becomes more complicated if the mortgage isn’t fully repaid once the house is sold.

DID YOU KNOW: Real estate statistics for 2022 show the worth of the US real estate market is $33.6 trillion, and the lowest mortgage rate was recorded in January 2021. Check out our guide for more fresh housing market predictions!

How to Sell a House With a Mortgage?

There are a few different ways to sell houses with a mortgage, and we’ll outline each one for you below.

  • Check the Remaining Loan Balance

As already mentioned, selling a home with a mortgage is possible, but you must first find out how much of your loan is still outstanding. This can help you get a head start on planning how much you’ll need to pay your mortgage company to pay off your debt once you sell your home. You should price your home at the very least to enable you to pay off your mortgage. You have more equity in your house the lower this number is in relation to your initial loan balance.

Property equity is the gap between the value of your home and the amount you still owe on it. Your chances of making more money from selling your property after paying off your mortgage increase as your equity increases, which is why it’s crucial to know the exact number!

  • Choose the Right Time to Sell

Whether you’re selling your house with a mortgage or without it, you need to choose the ideal season to sell your house and understand the seasonal fluctuations in the real estate market. However, moving is frequently a personal choice, and additional elements such as your financial circumstances and the current state of your home play a role what the average time to sell a house will be and when to put it on the market.

Spring is typically regarded as the ideal moment to sell a house, since historically, most deals occur during this season and homes sell fastest. Seasonality has an impact on the housing market supply and demand at various times of the year.

Moreover, it’s very important what kind of market you’re entering with your home, as the buyer’s and the seller’s market are very different from one another.

When selling a house with a mortgage still on it, it’s understandable you might want to set a higher listing price, but you need to play wise and check the competitors’ prices. That’s why it is advisable to ask your real estate agent to conduct a comparative market analysis before choosing the time to sell.

  • Prepare Your House for Sale

Before you can sell your house, you need to get it ready for potential buyers, including making any necessary repairs, decluttering, and staging the home so it looks its best. By taking the time to do this upfront, you can help ensure a successful sale—and when you sell a house with a mortgage, you probably want to sell it as soon as possible.

Once your home is in tip-top shape, you can consult your real estate agent to set the listing price for it after comparing it to similar properties in the area before you begin marketing it to potential buyers.

  • Set a Fair Price for the House

When it comes to selling houses with a mortgage, it’s important to set a fair price for the property. House prices were high in 2021, but you don’t want to overprice the home and have it sit on the market for months, or underprice it and leave money on the table.

However, there are a few things to keep in mind in terms of price when you want to sell a house with a mortgage:

  1. The first is the remaining loan balance—you’ll want to make sure to price the home high enough to cover the remaining mortgage balance. Otherwise, you’ll be stuck with a mortgage and no house.
  2. The second are the market conditions in your area. Take a look at similar homes in your neighborhood or city and see what they’re selling for to get an idea of what your home is worth.
  3. Finally, consult with a real estate agent, as they can help you price your home competitively and sell it quickly.
  • Cover the Closing Costs

When you sell a house with a mortgage, you’ll also need to cover the closing costs. These are the fees associated with the sale of the property, including the real estate agent’s commission, title insurance, escrow account, prorated taxes, homeowners association dues, and other miscellaneous costs.

You can typically expect to pay around five to six percent of the sale listing price in closing costs—for example, if you’re selling your home for $200,000, you can expect to pay $12,000 in closing costs.

  • Pay Off the Remaining Mortgage When You Sell the House

Can you sell a house while paying mortgage? The answer is yes, but once you’ve sold your house and covered the closing costs, you should pay off the remaining mortgage balance. This is typically done with the proceeds from the sale of the property, but if your mortgage balance is large, you may need to add some money on top of that to pay it off.

Obtaining a payback estimate from your lender is crucial while using the money from selling your house to pay off your loan. Because you owe interest up to the date of the move, you can’t just send in a check for the loan sum.

Your payment quotation will have an expiration date when you receive it. The sum stated is what you owe as long as your payment is received before that time—otherwise, a fresh quote must be created. You receive a refund for whatever interest you don’t have to pay because you sold your property sooner if you make your payoff before the expiration.

Key Takeaways

Can you sell a house with a mortgage on it? Yes, homes are frequently sold before the mortgage is entirely paid off.
The first and foremost when it comes to selling houses with a mortgage is to find out how much of your loan is still outstanding.
Choosing the right time to sell your house is also a very important factor, so you need to understand the seasonal fluctuations in the real estate market.
Setting a fair listing price for your property is another crucial thing in the selling process.
When you finally sell the house with a mortgage, you need to cover the closing costs and pay off the remaining mortgage.

Is It Possible to Sell a House With Negative Equity?

If your home has negative equity, you owe more than its worth on it. So, can you sell a house before paying it off if it has negative equity? Yes, this is a perfectly legitimate approach to selling your house! However, keep in mind that you’ll be responsible for paying the difference. It’s typically advisable to hold onto your property until the value increases enough for you to be able to pay off your mortgage.

A short sale possible if you’re having trouble making your payments and need to relocate. Here, the lender consents to accept less than what you owe on the mortgage, and they must consent to the selling.

Therefore, if you’re selling a home with a mortgage, it’s important to understand your equity situation. The difference between the market value of your house and the outstanding mortgage debt is known as equity. So, if your home is worth $200,000 and you have a mortgage balance of $150,000, you have $50,000 in equity.


When it comes to the real estate market, buyers and sellers alike are often hesitant, often wondering: “Should I sell my house?” or “Should I buy a new home?” Nevertheless, while selling a house with a mortgage can be a bit tricky, it’s definitely possible—just make sure you understand your equity situation, set a fair price, and cover the closing costs. With a little bit of planning, you can sell your house and pay off your mortgage in no time.


Can you transfer the mortgage to another house?

You can sell your house with a mortgage, but you’ll need to pay off the remaining balance, which you can do with the proceeds from the sale of the property. Alternatively, you could sell the house for less than the mortgage balance and use the proceeds to pay off the loan.

Do I need to tell my mortgage company if I sell my house?

You don’t have to inform your lender about your house sale until you’ve accepted an offer. However, depending on your circumstances, it may be better to let them know early so they can provide you with an accurate mortgage payment estimate. This figure will help you determine what the sale price must be in order to cover the monthly mortgage payment.

How does selling a house work when you have a mortgage?

Can you sell a house with a mortgage and how this process works is a very common question. In a nutshell, when a property sells at settlement, the buyer contributes money to the total that’s equal to or greater than the selling price of your house.


As challenging as she looks, Kristina loves to question things. Her analytical skills give us a fresh look at markets, products and services and her experience as a real estate agent keeps our related topics up to par.

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