Can You Sell a House Before a Mortgage Is Paid Off?
You can sell your house before paying off your mortgage. Most mortgage terms are 10 to 30 years. Nearly 20 percent of all homeowners have bought more than one home in their lifetime. They likely sold their current home and bought another one before paying off the mortgage. In other words, there is nothing unorthodox or strange about selling your house while you still owe the lender.
The question is why you are selling your house – or, more importantly, how you plan to sell your house. For instance, you may be trying to avoid bankruptcy or foreclosure. So, you need an alternative to a traditional house for selling your house and getting out of your mortgage. Fortunately, there is a quick way to sell your property before you pay off your mortgage.
Why You Can Sell Your House Before You Pay Off the Mortgage
The mortgage lender doesn’t care if you sell your house. The lender’s only concern is whether the sale price covers the loan balance. If you can pay the mortgage, selling your house is not an issue.
Problems With Selling Your House the Traditional Way
However, establishing the sale price can be tricky due to all your selling expenses. The three biggest home-selling expenses include
- Home repairs and upgrades
- Realtor commissions
- Closing costs and fees
You can’t just set a sale price above the mortgage balance. Instead, you need to set the sale price minus the selling expenses and hope that what’s left over covers the loan balance.
Here’s an example:
Home Repairs and upgrades
Realtor Commission (6%)
Closing Costs (4% of the loan)
Profit After Expenses:
Loan Balance Remaining
Can I Sell My House During Bankruptcy or Foreclosure?
Yes. Even if you are going through financial hardship, in most cases, the lender will allow you to sell your house. Again, it must satisfy the loan balance. Here’s why:
Lenders want to avoid two things:
- Owning a house: When a lender forecloses on your home, they have to assume ownership of the property. As a rule, banks don’t like owning properties. Why? Because they have to manage them. Plus, they have to go through the hassle of finding a buyer for the house.
- Having foreclosed properties on their books: A bank or mortgage company that has too many foreclosed properties is often scrutinized for being a hard lender. Banks don’t want a bad reputation with potential buyers.
In either case, the lender would rather work with you to sell the house and recoup as much of the loan balance as possible.
A Cash Sale Can Help You Get Out of Your Mortgage
There are several reasons why you may want to sell your house fast and get out of your mortgage: bankruptcy, foreclosure, probate, divorce, new job, military transfer, damaged house, rental house, or old house.
Regardless of your reason, a traditional home sale may not work for you. A traditional sale can take up to 60 to 90 days and cost you thousands of dollars in selling expenses. A better option may be a cash home sale. In a cash home sale, you work directly with a house-buying company in St. Louis, Missouri. The buyer makes a fair cash offer and closes the sale in as little as seven to 21 days.
How does a cash sale help you get out of your mortgage?
- You can close the sale in a week or two.
- There are little to no selling expenses.
- Sell your house as-is – no home repairs or upgrades.
- Sell your house regardless of your financial situation.
- Work with a single pre-qualified, committed buyer.
When you sell your house for cash you have no selling overhead. You don’t pay realtor commissions or home repairs. The buyer will often pay up to 100% of the closing costs. Whatever price you agree to sell the house for will likely not be undermined by thousands of dollars in selling costs.
Sell Your House to Pay Off Your Mortgage with a Cash Sale
If you are a homeowner and you want to sell your house before you pay off your mortgage, contact Klamen Real Estate Group. We buy houses as-is. We can pay cash for your property and close in as little as seven to 21 days.
Call 314-721-6800 to get a fast cash offer. Sell your house fast in St. Louis, Missouri.