If you sell it for more than you owe on it, the mortgage holder gets paid off first, the closing costs are deducted, and then you’d get a check for whatever was left.
If you sold it for less than what you owed on it, you’d have to come up with the balance and pay it to the mortgage holder (bank, usually).
Can I sell a house that is not paid off?
The simplest way to sell a home you still owe money on is to sell it for more than what you owe. When the home is sold, those funds are used to pay the remaining balance on your loan and you can retain the remainder (if any) as profit on the sale.
Can you sell a house if you still have a mortgage?
Put simply, in a traditional sale, you should be able to sell your home for more than what you currently owe on your mortgage. If you’ve been paying down your mortgage over the years, you’ll have built up equity in your home, which you can cash in on when you sell.
What happens to your loan when you sell your house?
When you sell your home, the buyer’s funds pay your mortgage lender and cover transaction costs. The remaining amount becomes your profit. Your loan is repaid to your mortgage lender. Any additional loans (like a HELOC or home equity loan) are paid off.
Do you have to pay off mortgage before selling?
Before You Sell Your Home
If you’re thinking about selling your home, it’s best to contact your mortgage lender and ask for your current mortgage payoff amount. What’s more, you’ll need to use the money from your home sale to pay off your mortgage loan.
What happens when you sell a house that isn’t paid off?
A prepayment penalty is a fee you may have to pay if you sell before your loan is paid off. Prepayment penalties are less common than they once were, and some prepayment penalties only cover a specific period of time — say, if you sell within five years of buying.
How long should you own a house before you sell it?
Regardless of other factors, it’s best to live in the home at a minimum of two years before selling. If you live in your home as a primary residence for at least two of the five years prior to sale, you can exclude $250,000 ($500,000 for married couples) of the profit from your sale.