Looking to Sell Your Home With a Mortgage? Here’s How

If you’re like many Americans, you may own a home, but perhaps you don’t consider it your “forever home.” You may even keep a mental list of potential properties in your area, just waiting for the right time to buy. However, if you’re waiting until your mortgage is paid off to make a move, you could be missing out on your dream house. Let’s take a look at how to sell your home with a mortgage, just in case that property you’ve been eyeing goes on the market before you’ve made your last payment.

Looking to Sell Your Home With a Mortgage Here’s How

Gauge the market

If selling is in the imminent future for you, make sure you’re watching market trends to ensure that you get the most for your property. While most homeowners have positive equity in there home, it’s possible for your equity to be in the negative if you owe more than your home is currently worth, as evidenced by the big real estate crash of 2007-2008. As with the economy, the real estate market fluctuates, and if you sell at the wrong time, you might find that your home is worth less than what you initially paid, leaving you with a mortgage balance even after the sale of your home. Yikes!

Calculate how much you still owe

While your monthly mortgage statement will show a total figure for the amount remaining on your loan, that figure is rarely the payoff figure. To accurately determine how much you have remaining on your mortgage balance, contact your lender and ask for your payoff amount. Your mortgage payoff total will have the interest and any other fees accounted for and should be an accurate number for two weeks to a month.

Determine your home value

To ascertain whether now is a good time to sell, you need to calculate the amount your home can sell for in the current market. This can be tricky, but a real estate agent will be able to give you the most accurate number, as well as quick tips for selling your home. But if you’re not ready to work with an agent, you can get a rough estimate using one of the many home value calculator tools available online.

Calculate closing costs

Because you’ll be selling your home with a mortgage, you have other factors to take into consideration before you get your final total. You’ll need to figure out how much it will cost to sell your home. Yep, there are costs associated with selling. 

First, you’ll want to subtract the mortgage payoff amount from the estimated home value number. But, we’re not done yet. You now need to subtract estimated closing costs from the remaining balance. Closing costs include agent commissions, outstanding taxes, title insurance, and home repairs that come out of an inspection. Again, you can find a closing cost estimating tool online that will give you a rough estimate of the amount of money you’ll be spending to close the sale of your home.

Is it a good time to sell?

Whew! If you made it through all of that, you’ll have your total profit after the sale of your home. If you’re wondering if you can sell your home with a mortgage, your profit after selling will provide that answer for you.

If you’re planning on rolling the proceeds from your home sale into a downpayment on a new home, you’ll want your profit to be high enough to cover those costs. If you find yourself with only a little leftover after your home sale, you’re better off waiting out the market if you have the luxury of time. 

With a little planning, you’ll be in great shape to navigate selling your home with a mortgage. Just make sure you take into account all associated costs to determine if selling your home now makes the best financial sense. And if now’s not a good time, and time is on your side, don’t be afraid to wait out the market, as it will likely bounce back in no time.


Money Journey

Money Journey


  1. I agree that gauging the market and your financial situation is much more important than waiting to pay off a mortgage. If your situation dictates that you need a new house then you should go and talk to a mortgage professional about what options you have.

  2. Getting a mortgage is a huge commitment which can impact your life in many ways. I live in a rented flat and despite the fact, that is not one of the best properties I have lived by now, I redecorated and changed every room so I get the comfort that I need.

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