Are you looking to sell your home before paying it off? If you are, you’re not alone. Since most mortgage terms are for 30 years, it’s not uncommon for homeowners to sell their home before paying it off completely.


It’s possible and normal even to sell your home before you’ve fully paid off your mortgage. In fact, there are some reasons you might be better off doing just that. However, you’ll need to educate yourself about the pros and cons of this decision, as well as the proper steps to take before starting the process.


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Why Sell Your Home Before Paying It Off?

First, let’s talk about why you might choose to sell your home before you’re done paying for your mortgage. Most mortgages are for a term of 15 to 30 years. That’s a long time to live in one place and in one house. Sometimes life gets in the way.


You might get a new job in a new city. You might start a family and need more space. You might simply be ready for a change after being in the same home for a few years. All of these are valid reasons, and you don’t have to feel trapped in your home until you’ve paid off every last dollar.


Most home sellers today have a mortgage already. There are still things you need to look out for before you decide to move like whether you have a prepayment penalty or if this is the right time to sell if your market. If you’re not careful, you could end up hurting your bottom line.


How to Sell Your Home with a Mortgage

Now that you know why this might be a good option for you, let’s break down the individual steps. When you sell your home to a new buyer, their mortgage will be used to pay off your remaining balance. If you’ve been up-to-date on payments and you’re selling the property at a higher value, this usually leaves money leftover which you can put towards your next home or keep as profit from the sale.


  1. How much do you owe? Before getting started, you need to determine just how much you still owe on your mortgage. Contact your lender and request your payoff amount. This is how much you must pay to satisfy the terms of your mortgage, and it includes any interest you owe. This isn’t the same as your current balance.
  2. Calculate your proceeds. Next, you need to crunch the numbers to see just how much you can earn on your home sale. You can use a home price calculator to determine how much you might be able to earn on your home. From this number, subtract any fees as well as your payoff amount.
  3. Begin the process. Now that you know just what you stand to gain, it’s time to continue with the home sale process. You’ll want to contact a real estate agent and start promoting your home to potential buyers.


This is the simplest possible process. In an ideal home sale, you’ll sell your home with enough money to easily pay your loan balance. You might even turn a profit on the sale which is another perk of deciding to sell before you pay off your mortgage.


However, in some cases, your home isn’t worth what you currently owe on the mortgage. You might need to do a short sale in this case, but it will do some damage to your credit. In a short sale, the lender agrees to take a reduced amount to sell your property. Luckily, these are not common. As long as you do your research before you sell, you should be successful.


Ultimately, you shouldn’t feel obligated to stay in your home for the entire duration of your mortgage. Most homeowners will need to sell their home before their mortgage is paid off, so this is a common situation that shouldn’t leave you too overwhelmed. Just ensure you talk to your lender and know what you’re getting into before you put your house on the market.