5 Tips for Selling Your House With a Mortgage In TN

A couple in Memphis, TN lists a house with a mortgage for sale

Selling a home remains challenging for anyone, especially for homeowners that must make mortgage payments. You can feel stressed out and not know how to go about selling, especially if you don’t know whether you can do so with a mortgage balance.

After all, you own the home but still owe money on it, so will your mortgage lender allow you to sell it? You’ll ask, can you sell a house with a mortgage, so ensure you review some tips and understand the process. 

Luckily, you can get the answers and determine the best action for the current home you want to place on the housing market. Doing so will help you work with the lenders while also seeking a new home as you plan to move.

Can You Sell a House With a Mortgage?

If you want to know can you sell a house with a mortgage, you’ll be happy to know you can sell it. Even though you owe money and must pay the interest rate, you can sell your home and pay off your mortgage before going with another house.

Whether you find cash home buyers in Tennessee or sell to standard home buyers, you must remember multiple points regarding the process.

  • You must pay off the debt
  • Using the leftover money
  • Securing a new mortgage loan

Since you still have homeownership and your old house, you must make your monthly payments. Since you committed to the debt and still have property taxes, ensure you don’t overlook these debts and fees to avoid foreclosure.

After you cover closing costs and pay your realtor, you’ll want to use the rest of the money toward your current mortgage. So ensure you pay off the rest to cover your loan balance, allowing you to use the rest of the money for a second mortgage if you plan to buy a new house.

You’ll then use it as your down payment, so you’ll get a lower interest rate on your new mortgage debt. Doing so will help you secure better interest rates as you cover a fair portion of the home based on what you have left.

So while you can sell your home and work with the sale price, you must cover your outstanding mortgage with the money you made.

Tips for Selling a House With a Mortgage

As you look into a home sale, you’ll want to review tips for selling a house with a mortgage. Doing so can help you maximize your money, understand what steps you should take, and work through everything with your real estate agent.

Work Out If You’re Going to Have Negative Equity

Before you get involved with selling your home, you must determine if you’ll have negative equity. Negative equity means borrowers don’t sell their homes for enough money to cover their previous houses.

You should compare your home’s current value to the previous value to understand how much money you’ll get. You’ll then see how much of it you can use to repay the previous loan, allowing you to secure a mortgage for your new home.

If you have negative equity, you must take additional steps to protect yourself financially while covering your capital gains tax.

Make Sure Right Now Is the Right Time to Sell

If you don’t have to move, you should determine if you should sell your home right now. You can face multiple situations indicating you should wait before you sell it.

  • Being in a buyer’s market
  • A drop in real estate value
  • Signs of property increasing

If you find yourself in a buyer’s market, you’ll struggle to get more money for your home. On top of that, the market can change with time based on the current interest rates, meaning real estate value could drop, making it challenging to sell.

On top of that, if homes show signs of increasing value, you can wait to sell them and maximize your money, so look into your options.

Set a Fair Listing Price

Speaking of finding the right time to sell, you must identify a fair listing price. If you set it too high, you won’t get as many offers, causing you to lose money through mortgage payments. On the other hand, if you put it too low, you may end up with negative equity.

You can go through the cash offer process on a house to determine a fair value if you want to get cash from it. Otherwise, you must research houses to see how much money you should get from your home without facing any issues or needing to adjust the price.

Make Sure to Cover Closing Costs

Even if you choose a cash-out option, you should calculate the closing costs regarding your home. Since you must pay your realtor and others involved with the process, some of the money will go to them, but it’s usually percentage based.

You should check these contracts beforehand to ensure you get everything necessary for the home. Doing so takes time, but you can avoid miscalculations and issues if you remember expenses and look into your options.

If you don’t consider your closing costs, you could face negative equity, so keep that in mind.

Make Sure the Sale Covers the Remaining Mortgage

Speaking of negative equity, do everything you can to ensure the sale will cover your mortgage. Even if the value of your home drops, you can still cover your mortgage based on how much money you paid and the amount left on your house.

For example, if you paid off 50 percent of your home, you won’t have to get the original value out of it. While you should get as much money as possible, you don’t have as much to cover, meaning you have more leeway while tackling the situation.

A couple in Memphis, TN lists a house with a mortgage for sale

How to Sell a House With a Mortgage

If you determine can you sell a house with a mortgage, you can rest easy knowing it’s similar to the standard home-selling process. This includes putting it on the market, having people look at your home, and agreeing with a signed contract.

While you’ll follow those standard steps, if you want to sell it quickly and move into your new home, you’ll want to review alternative ways to sell a house.

  • Look into short sale
  • Seek cash buyers
  • Utilizing escrow when necessary

While you consider the sale price and selling your home, you can utilize a short sale. You may get less money from a short sale, but getting below the market value can save you money compared to putting the house on the market for months and making payments.

You should also consider We Buy Houses Memphis as a cash buyer. A cash offer can work great since you’ll get the money immediately, allowing you to use the money on your next house. You can avoid a home equity loan and get a new place.

As you go through this for the first time, ensure you get an escrow to hold onto the money, ensuring you’ll get the initial cash. You can also utilize the real estate market to seek buyers, but a fast sale and cash buyer may work best for your situation.

Considerations When Selling a House With Negative Equity

As you sell your home, the value could drop, causing you to get less money out of the sale. When that happens, you can have negative equity, meaning you must cover the mortgage payoff while you find a home on the local market.

That means you must consider various points while going through your equity to cover everything.

  • Your debt-to-income ratio
  • Looking into refinancing
  • Seeking a HELOC
  • Not using a real estate agent

You must consider how much debt you’ll collect compared to your income. You may need to shift from buying to renting if you can’t afford it. On the other hand, if you think you can tackle it, you can pay off your loans and maximize your sale proceeds.

You can also refinance your loan before you sell your home. Even if you can’t raise the home price and get more money from it, you can lower your loan through refinancing. You can utilize a home equity line of credit (HELOC) to help you secure a better loan without facing a lien.

You must cover an agent commission if you work with a real estate agent. You should sell a house fast in Bartlett to save you some time and money you would’ve spent on a real estate agent.


As you wonder if you can sell a home with a mortgage, you’ll rest easy knowing you can. You won’t recover the down payment and must tackle the payoff amount, but you can put the leftover money toward your next home.

Based on the value of your home and if you follow the correct tips, you can get more money from your home. The amount varies based on home equity, so look into how you sell a house and consider what you’ll do if you face negative equity on your old home.

As you look for people to buy your house, you should utilize the Capture and Convert WordPress plugin to help you find more potential buyers.

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