Sometimes, just when you do not expect, you change gears in life. Your usual goals take a backseat and you are left planning life all afresh. This happens when and when your investments are all sorted and you are financially “settled” down.

This is especially relevant when you have had a mortgage covering your dream home and suddenly you change your mind about career or personal life decisions. This triggers you to consider selling off your much-loved home too. However, whenever relocation is involved, you will need a place to stay in the new place too. This in turn makes you fall into the process of house hunting yet again. Only this time, you have a home with an active mortgage on, while needing to invest in a new one.

Homeowners facing such a situation often get puzzled wondering if they are at all eligible to sell an existing property having a mortgage on the same. You might find yourself asking—can I sell a house with a mortgage? The answer lies in the affirmative.

However, since such a process involves too many tax and paperwork implications, you do get to realize that you might not be able to handle it all yourself. Hire a professional agent or financial advisor who will sail you through the process of selling a home with a mortgage. Here are also few things to consider while dealing with such a situation.

Things To Do

To begin with, talk to your mortgage provider. Understand the status of your existing mortgage first and the current payoff amount involved.  The amounts tend to vary every week to every month due to interest accruals and changes.

Unless you are aware of the exact mortgage overdue, you cannot decide on a fair selling price. The home sale must cover the mortgage ideally while also bringing in some decent profit.

Remember that your mortgage lender will be able to assist and inform you on the mortgage. Of course, a new buyer will not be able to move into your property sold off, if the mortgage isn’t clear. However, the lender can do little else in terms of any advice for sale.

Title for Property

Hire an agent to ensure there isn’t a glitch with the title of your property. You need the title agent along with the mortgage payoff amount as well as your account number. Once you sign the relevant documents, the title agent will be able to send the final payment on the mortgage. The next step is title transfer to the new buyer.

Be Prepared For Setbacks

While the process always appears smooth as silk on paper, sometimes you might face setbacks. There could be additional charges from the lender’s end you need to shell out. There could even be a penalty that might suddenly spring up. Of course, these problems are all dissolvable but you have to prepare for such sudden issues.

Negative Equity

This is one problem no one talks much about. However, this could be a major issue in case you happen to have negative equity. This means that you need to pay off more than the original or market worth of the property. This means that you will not be having the right to use sale proceeds to pay the mortgage. In such cases, a loan payoff in full or a refinance option would work best.

As you plan to sell off the house for newer beginnings, assess your mortgage and its payoff situation at the outset. Talk to a lawyer to understand the legalities involved instead of assuming something to be cakewalk.

Summing Up

While it is possible to sell off a home with an active mortgage, it still calls for a lot of extra work. Assess the situation well and only then go ahead and make an informed choice.