What occurs when you sell a house before you pay off the mortgage? At the time of closing, the title company or escrow agent deducts your net sales proceeds from the payoff amount and pays off your loan by making a single loan payoff wire transfer. Then any remaining equity goes to you, and the shortfall somehow has to be paid. Do you have to keep paying your mortgage if you sell your house for less than you owe? Yes, unless you work out a lender-approved short sale, deficiency waiver, or deed-in-lieu deal, a deficiency judgment leaves you on the hook for the difference between the balance of your loan and the amount for which the home sells. If you can't pay off your mortgage by selling your home, can you still obtain a mortgage on a new home? Absolutely, you might use bridge loans, contingent offers, or assumable mortgages to close timing or equity gaps. Another less common strategy is to get your buyer to take over your low-rate FHA or VA mortgage loan, shifting the debt so you're free to qualify new on your next mortgage without two notes pending. How long is it before you have paid off your mortgage after you sell? When a payoff instruction is received in closing, the lender sends a payoff to the lender, so the lien of the mortgage should be satisfied in his name in the next 1-3 working days for electronic loans, or 10 working days for portfolio or out-of-state loans. Must you refinance what you owe on your home after you sell if you do not make enough to pay off the loan? The answer is not necessarily, you can put the debt out of your name via sale, short sale, deed in lieu, or bridge loan without an actual refinance. The only relevance of refinancing is if you're one of the few undergrads who has a remaining balance and who wishes to consolidate the balance into a home-equity line or roll it into your next mortgage.

When you sell your home before the mortgage is paid off, whatever amount is left on that mortgage will be repaid by the profits from the sale. So, if the house sold for more than what's left on the mortgage, the seller gets to keep whatever is leftover after the mortgage is paid off. If the mortgage amount is higher, the seller will be responsible for paying what's left.

1) When you sell a house before you pay off the mortgage, you'll usually take the proceeds of the sale and use them to pay off the rest of the mortgage. 2) Yes, if you sell your home for less than you owe on the mortgage, you're responsible for the remainder of the mortgage. 3) It's possible, but it definitely gets harder. An outstanding mortgage will raise your DTI ratio and credit utilization rates, which will hurt. 4) Assuming your house will pay off the mortgage, the day of closing is the last day that you have to make mortgage payments. 5) Most lenders will need you to refinance, yes. Your mortgage was secured by your home, and since you no longer own the home, your lender will either want different collateral or to refinance what you owe as a private loan.

What happens when you sell a house before your mortgage is paid off? Your closing agent takes the sale proceeds to cancel your remaining balance in one fell swoop. If there's any excess, you get that money, and if there's a shortage, it is covered at or before closing. If you sell for less than you owe, do you still owe on your mortgage? Yes, unless you enter into a lender-approved short sale or deficiency waiver agreement, you're on the hook for the spread between your loan balance and the sale price. Another less crowded road is to have the buyer get into second position behind the bank or bridge lender, with you providing the mortgage-called-carryback-that, in effect, rolls your gap into the buyer's financing, but this also requires very, very tight legal structuring. If you're unable to pay off the mortgage on the home you're selling, you cannot get a mortgage on another new home. Absolutely, there are options like bridge loans, contingent offers, and mortgage assumptions that can close the gap on missing equity. I've seen investors secure 90-day interest-only bridge loans against their current property, close on the new one, and unload the old property within the window. Another creative option is to have your buyer assume your low-rate FHA or VA loan, and keep the closing proceeds in your pocket rather than you having to carry two loans at the same time. How long should it take to pay off your mortgage after you sell? The payoff is actually done at closing, but it's recorded on your satisfaction of mortgage, which could take 1-3 business days with most lenders, or up to 10 days for portfolio or out-of-state loans. If you sell your house, do you have to refinance the mortgage in your name? Not so, there are ways to snuff out the loan with sale proceeds, short sale agreements, or other payoff strategies, and not refinance at all. Refinancing becomes an issue only if you decide to consolidate any remaining debt, for example, lumping a shortfall into a new HELOC or folding it into your next mortgage.

What occurs when you sell a house before the mortgage is paid off? When you close, the escrow officer writes a check to pay off your existing loan in full, wiping out the existing mortgage lien. If there's any additional money left over, that's where you come in, or any shortage you'll need to make up before or at closing. One non-standard strategy here is to negotiate a simultaneous close; you lock in a HELOC payoff just before you close, avoiding timing mismatches among buyers, sellers, and lenders. You're still paying on your mortgage if you sell for less than you owe. Yes, unless your lender is willing to short-sell the property or waive the deficiency, you're on the hook for the difference between those sale proceeds and your loan payoff. Will you be able to secure a mortgage on a new home if you won't be able to pay off your mortgage via a home sale? Sure, you can get into bridge loans, contingent-purchase offers, and assumable mortgages to fill those gaps. I've watched investors get a 90-day bridge loan on the equity in the house they were selling, then close on a house and sell the old one. In an unusual twist, a Salem buyer got an assumable FHA loan on his old home, letting the new buyer take over a 3.25% rate, then qualified for a new purchase mortgage without two payments at once. There's also the issue of how long it would take to repay your mortgage after a sale. The actual payoff is completed at closing; however, the wire may take anywhere from 2 to 10 business days for the lender to receive, post payment, record the satisfaction of mortgage, and return a lien release. If you sell a home and you still owe money on your mortgage, do you have to refinance? Not so fast, you can pay off the loan now with sale proceeds, short sale agreement, or bridge financing without refinancing the whole kit and caboodle. Refinancing only becomes a consideration if you decide to consolidate what's left, for example, rolling a shortfall into another HELOC or embedding it within your subsequent mortgage.

What happens when you sell a house before the mortgage is paid off? Closing: At closing, your title company distributes the proceeds from the sale to pay off your remaining balance, which clears the lien and releases you from additional payments. Do you give any money on your house if you sell for less than you owe? Yes, unless your lender allows a short sale or forgives the deficiency, you are still on the hook for the difference between what you owe on your loan and the proceeds from your sale. How can you get a mortgage on a new place if you can't pay off your mortgage by selling the home? Sure, you can use bridge loans, contingent purchase offers, or mortgage assumptions to make up the difference in financing. As a non-conforming act, some sellers negotiate to have the buyers take over their old FHA loan at a low rate, which will leave them with a surplus at the closing table rather than having to make two simultaneous payments. When can you pay off your mortgage after selling? The payoff is made at closing, and the lender records the release of lien immediately after, usually 1-3 business days, though in more complex or rural-lender situations, the satisfaction document may take up to 10 days to receive and file. When you sell a house, what do you do with the mortgage if you still owe money? Not exactly, you can pay off your original loan with sales proceeds, a short sale, or other payoff methods without a traditional refinance. Refinancing only comes into play if you want to bundle your outstanding obligations, for example, rolling over a default into a new HELOC or folding it into your next mortgage.

What to know before you sell a house with an outstanding balance on your mortgage? At closing, your lender is paid the proceeds that the lender was owed to clear your debt; in other words, the sale proceeds flow through escrow and pay off the loan. Any added funds then belong to you, the seller. I recently brought a deal to closing off the market, and we set the closing up so that the buyer's deposit was for exactly what the seller owed on the property and therefore my client didn't have to part with a single dollar in savings at closing." A nontraditional variation is making a short-term "bridge" payoff through a home-equity line of credit, which — by advancing the mortgage payoff, you can sometimes use to extract better closing dates from sellers or to preempt last-minute wiring snags. If you sell your house for less than you owe on your mortgage? Short of the lender agreeing to the short sale or waiving the deficiency, you are liable for that difference between your payoff and the sales price. I once counseled a homeowner $20,000 underwater about a lender-approved short sale and also a small deed-in-lieu fee, which saved her a full deficiency judgment. If you can't pay off your mortgage with a home sale, are you able to take out a new mortgage on a new home? Yes, with tactics such as bridge loans, contingent offers, or assumable mortgages. How soon do you pay off your mortgage when you sell? The final payoff is done at the closing table, but it may take a few business days to finalize the payoff and for your lender to record the satisfaction of the mortgage. I know in my personal dealings that most title companies wire funds and record the release within 1-3 days ,but in the case of some jumbo or portfolio loans, it can take up to 10 business days to process completely. Are you required to refinance what you owe on your mortgage if you sell (and still owe money)? No, you would not, you can pay off your current loan through the sale proceeds, short sale, deed in lieu, or buyer assumption. The refinancing part of the equation only kicks in if you decide to roll or restructure any remaining debt, whether deficiency into a home-equity line, or the financing on your next purchase.

What happens when you sell a house before the mortgage is paid off? If you sell your home before the loan is paid off, the remaining loan balance is generally paid from the sale proceeds at closing. The title company facilitates this process by obtaining a payoff statement from your lender, which is the amount you owe on your mortgage plus any interest that has accrued up to settlement and may also include modest recording or administrative fees. After the sale is complete, the title company makes the final payment of your mortgage with the buyer's funds and forwards any overage to you. Do you still pay on your mortgage if you sell for less than you owe? Yes — and that's where things get complicated. If your home sells for less than you owe on the mortgage, you are underwater and still owe the remaining balance after the sale. This is called a shortfall. Unless the lender agrees to a short sale — where they accept less than what is owed and write off the difference — you also then likely owe money at the closing, money that you'll need to bring in the form of cash to the closing table to cover the difference. Can you get a mortgage on a new home if you can't pay your mortgage off with a home sale? You can generally, but it depends on your financial profile and the lender guideline. And if you have an existing mortgage and it doesn't get fully paid off from the sale — or if you owe a deficiency from a short sale — it may make it harder for you to qualify for another loan. But lenders will consider the rest of your debt-to-income ratio, your credit score and reserves. So if your income covers both of those debts, or if you're creating a plan to pay down the deficit, you still might be approved. Do you have to refinance what you owe on your mortgage if you sell and still owe money? Not usually. Or if you sell and still owe money — whether you need to refinance depends on whether the sale exceeds your loan balance. If not, and you don't have the cash available to make up the difference at closing, refinancing might be an option — but not an easy one. The lender probably won't let you refinance with a loan you're trying to pay as part of a sale. Instead, you might be able to take out a personal loan, work out a repayment plan, or— in the case of a short sale — ask for forgiveness on the remaining balance.

- If you sell a home before you've finished the mortgage, which is something that most people do, the proceeds from the house will usually go to pay off the mortgage, hopefully with some money left over. - Yes, you still need to pay even if your house won't cover the balance. This is called being underwater on your house, and it's something people usually try hard to avoid. - Lenders are going to be more reluctant to give you a new mortgage if you haven't finished with your first one, but it's not impossible. - Assuming your sale price will cover the balance, you're only responsible for the mortgage until closing is finished. - Usually, yes. Lenders will want a different form of collateral, an immediate payoff, or a refinance.