Can You Sell Your House Before You Pay Off The Mortgage In Virginia?

Selling your home can be a whirlwind. There are repairs to work on, paperwork to file, and experts to hire. Like many, you may be wondering what happens to your mortgage when you sell your Virginia property. Can you sell your home before paying off the mortgage?

This article will look at how your mortgage works, what to look out for when selling your house with a mortgage, and what steps you should take to get it started.

Can I Sell My House Before I Pay Off The Mortgage In Virginia?

Keys on mortgage note and blueprints

How Your Mortgage Works

When you get a mortgage, your lender determines how much you qualify for and gives you a specific amount of money to purchase a home. In turn, you agree to pay back your loan – with interest – over 15 or 30 years and do not fully own the house until the mortgage is paid off. The loan amount is divided over the 15 or 30-year term, and the sum builds interest as each month passes. In the beginning, you will be paying more toward the interest of your loan than your premium (the actual property price). Then, as the years pass, a larger part of your monthly payment goes towards the actual house (the premium).

What’s Included in the Mortgage Payment

Your mortgage payment is a predetermined amount you pay every month toward your home loan. The predetermined amount is based on four major parts: principal, interest, taxes, and insurance.

Principal

The principal is the amount of money you have left to pay on the loan. For example, if you borrow $300,000 to buy a home and pay off $10,000, your principal is $290,000. To find out how much you owe on your mortgage, check your monthly statement.

Part of your monthly payment on your mortgage will automatically go toward paying down your principal. Usually, people have the option to put extra money toward the loan’s principal by making additional payments, which is a great way to reduce the total amount owed and pay less interest on the loan overall.

Interest

The interest amount you pay each month is based on your loan principal and interest rate. The money you pay in interest goes directly to the mortgage provider. As your loan ages, you pay less in interest as your principal amount decreases.

Taxes And Insurance

If your home loan has an escrow account, your monthly mortgage payment may include property taxes and homeowners’ insurance fees. Your lender will keep the money to pay those bills in your escrow account. Then, when your taxes or insurance premiums are due, your lender will pay those bills for you.

Can You Sell Your House Before Paying Off the Mortgage?

Can you sell your house before paying off the mortgage? Absolutely! A majority of homeowners sell their homes before paying off their mortgages. Even though you agreed to a home loan for 15 or 30 years, that doesn’t mean you have to live in that property for that amount of time before selling. Within those timeframes, life changes, requiring the need for different housing arrangements. So you definitely can sell your house before paying off the mortgage.

What to Look Out For When Selling Your House With a Mortgage In Virginia

When you sell your house, the profits from the sale are used to pay off your mortgage. If you don’t make enough from your property’s sale to pay off your home loan, you will end up making payments to the lender until you pay off the mortgage. You can choose to refinance or sell your home via short sale instead.

Some people think that they have to pay the total amount of interest divided over 30 years when they go to sell. Because they believe that agreeing to that interest means they have to pay all 30 years’ worth. Well, the good news is that is not true. The interest is only owed for every month you continue to pay toward the loan. When you officially sell, those interest payments stop, and you don’t get charged.

But before you get too excited, sometimes the lender will have an early payoff penalty on the loan if you decide to pay it back early. Before you sell your property, take a look at your contract with the bank for due-on-sale clauses- which is where you will find any information on penalties.

Steps to Pay Off Your Mortgage During a Sale

When you sell your house, paying off your home loan is not as simple as handing over a check to your mortgage company. Here are a few steps you will need to complete if you still owe money on your home when you choose to sell.

Step 1: Ask for Payoff Amount

How much do you owe on your mortgage? Before selling your house, the first thing you should do is contact your bank and ask for the payoff amount. The total payoff is the amount you still have left on your home loan. You will need this number to help you set the listing price for your house, to make sure you have enough to pay it back.

Step 2: Do A Title Search

Your mortgage lender will then connect you with a title agent, or you will need to find one on your own. The title agent will research your title to ensure there are no issues like liens against the property. You will also provide them with your payoff amount and account number.

Closing Day Date Calendar Word Circled Close

Step 3: Closing

Once you sign all the required documents for closing, the title agent will send your final mortgage payment to your lender. The title agent will then seal the deal by transferring the title over to the new buyer. And that’s it in a nutshell! An insider’s look at what happens to your mortgage when you sell your home and who pays the mortgage off at closing. 

If You’re Behind on Your Mortgage Payments…

As we pointed out, selling a house with a mortgage is extremely common. And in most cases, putting your home on the market, finding a buyer, and finalizing your mortgage debt when the house sells is all you’ll need to do to pay off that loan.

But if you’ve gotten behind on your monthly payments — or you find yourself approaching the risk of foreclosure — you may be worried that the conventional listing process can take two to three months from list to close. Besides, since contingent offers can fall through 1%-10% of the time, there is a chance that if you find a potential buyer, they could back out under an escape clause in the contract.

If you can’t wait that long without getting into deeper financial trouble, selling to a local home buyer could be something to explore. When you sell your home to a cash home buyer like Avante Home Buyers, you can expedite the closing process by eliminating the financing and appraisal contingencies with a traditional buyer. This could save you weeks or even months of expenses related to the home, such as taxes, maintenance, and insurance.

This can also be a great option if you’re dreading the thought of staging and showing your house to strangers.

So, don’t hesitate to at least get an offer with Avante Home Buyers without any pressure — you will be under no obligation to accept. Furthermore, when you work with Avante Home Buyers, there are no realtor fees, and they even help pay closing costs.  

If you would like to sell your house before paying off the mortgage in Virginia, give Avante Home Buyers a call today. 

Kevin Sun

Kevin is a real estate investor dedicated to helping homeowners sell their properties quickly and without the stress and hassle of a traditional listing.

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