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.
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.
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.
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.
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.
I'm John Mahan, Sales Associate with William Raveis Real Estate, Harwich Port Office.
Throughout his childhood, John Mahan spent summers on Cape Cod at his parents’ home in Dennis Port. His intro to the Cape was, as he puts it, when his parents “carried me down the stairs at Sea Street Beach when I was a week old.” With a lifelong connection to Cape Cod, it seemed only natural for John and his wife, Mary, to move to Harwich – where they still reside – with their two young children in 1996.
Prior to moving to Cape Cod, John lived in the Worcester-Auburn area where he worked for Mass Electric for 10 years and was a member of the International Brotherhood of Utility Workers. When John and his family moved to the Cape, he worked at NSTAR for six years.
John began his career in real estate in 2002 when he joined Team Waystack Realty in Harwich Port. He has been a consistent top producing realtor in the Harwich area for the past 20 years. John’s approachable demeanor, combined with an integral understanding of the Cape Cod residential real estate market, have allowed him to build trusting, long-term relationships with his clients – both sellers and buyers.
