Selling a home is a big step, and it’s not uncommon to still have a mortgage on the property when you decide to list it. If you’re wondering how selling a house works with a mortgage, you’re not alone! Many sellers have questions about the process, and we’re here to help you navigate it smoothly. Here’s a step-by-step guide to understanding what to expect when selling a home that still has a mortgage—and how The Ternullo Team can help every step of the way.
1. Determine Your Mortgage Payoff Amount
The first thing you’ll need to do is contact your lender to find out the exact amount required to pay off your mortgage. This is called the payoff amount, and it may differ slightly from your loan balance due to accrued interest or fees. Having this information is critical, as it helps you estimate how much you’ll walk away with after the sale. We’ll guide you in gathering the necessary information from your lender and assist in calculating your estimated net proceeds.
2 Understand Your Home's Market Value
Next, work with a real estate agent to determine the current market value of your home. Your agent will assess local market conditions, review comparable sales in your area, and help you set a competitive listing price.
If the sale price exceeds your mortgage payoff amount and closing costs, you’ll turn a profit. However, if the sale price is less than what you owe, you may need to consider other options, such as a short sale, which your agent can guide you through.
Our extensive knowledge of the North of Boston real estate market ensures that we accurately price your home to attract buyers while maximizing your return. Plus, we’ll explain your options if the numbers are tight and develop a strategy tailored to your unique situation.
3. Budget for Closing Costs
When selling a home, there are costs involved beyond paying off your mortgage. These may include:
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Real estate agent commissions
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Transfer taxes
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Attorney or title company fees
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Home repairs or staging costs
We can help you estimate these expenses so you can plan accordingly.
4. Pay Off the Mortgage at Closing
At closing, the proceeds from the sale will first be used to pay off your outstanding mortgage balance. The title company or closing attorney will handle this transaction, ensuring the lender receives the payoff amount.
If there’s any remaining money after covering the mortgage and closing costs, it’s yours to keep! Many sellers use these proceeds for their next home purchase or other financial goals.
5. Timing the Sale with Your Next Move
If you’re buying a new home while selling your current one, timing is key. Your real estate agent can help you coordinate the two transactions, whether that means negotiating a rent-back agreement, aligning closing dates, or finding temporary housing.
What Happens If You Have a Second Mortgage or HELOC?
If you have a second mortgage or a home equity line of credit (HELOC), those balances will also need to be paid off at closing. Be sure to inform your agent about any additional loans secured against the property so they can factor these into the sales process.
Selling a home with a mortgage doesn’t have to be complicated. With the right preparation and professional support, you can navigate the process confidently and achieve a successful sale. At The Ternullo Team, we specialize in helping homeowners north of Boston achieve top dollar for their properties while minimizing stress and hassle.
Ready to get started? Contact us today for a free home valuation and personalized selling strategy!