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    How to Sell a House with a Mortgage (2026 Guide)

    How to Sell a House with a Mortgage (2026 Guide)

    If you're wondering whether you can sell a house with a mortgage, the answer is yes. You have several options for how to do it. In fact, most home sellers still have a mortgage when they sell. According to the National Association of Realtors, approximately 60-70% of home sellers use their sale proceeds to pay off an existing mortgage.

    The process and outcome depend largely on three factors:

    • How much equity you have in your home
    • What type of mortgage you have (conventional, FHA, VA, or USDA)
    • Current market conditions, especially interest rates

    This guide walks you through your options and helps you determine the best path forward.

    Can You Sell a House That Still Has a Mortgage?

    Yes, absolutely. Having a mortgage doesn't prevent you from selling, it just means the remaining loan balance must be addressed as part of the sale transaction.

    Here's what typically happens:

    When you sell your home, the closing process includes:

    1. The buyer pays the purchase price (usually through their lender)
    2. Your mortgage lender is paid the remaining balance from the sale proceeds
    3. Closing costs and agent commissions are paid
    4. You receive whatever is left over as your net proceeds

    Example:

    • Sale price: $450,000
    • Remaining mortgage balance: $320,000
    • Closing costs and commissions: $30,000
    • Your net proceeds: $100,000

    As long as your sale price exceeds what you owe (plus closing costs), you can sell and walk away with money in your pocket.

     

    Your Three Main Options for Selling with a Mortgage

    Option 1: Traditional Sale (Pay Off at Closing)

    This is the most common approach, used by the majority of home sellers.

    How it works:

    • List your home at current market value
    • Accept a buyer's offer
    • Buyer obtains new financing at current rates
    • At closing, sale proceeds pay off your mortgage automatically
    • You receive remaining funds as profit

    Best for:

    • Conventional loan holders
    • Anyone who doesn't have an assumable low-rate loan

    Pros:

    • Simple, straightforward process
    • Most buyers and agents understand it
    • Works with any mortgage type

    Cons:

    • In 2026's high-rate environment, you may be leaving money on the table if you have an assumable low-rate FHA or VA loan
    • Buyer faces current market rates (6%+), which may limit what they can afford

    Option 2: Assumable Mortgage Sale (Premium Pricing)

    Available for FHA, VA, and USDA loans, this option has become extremely valuable in 2026's high-rate market.

    How it works:

    • Buyer takes over your existing mortgage (including your low interest rate)
    • Buyer pays you directly for your equity (the difference between sale price and remaining loan balance)
    • Your lender must approve the buyer (credit and income qualification)
    • At closing, the mortgage transfers to the buyer

    Best for:

    • FHA, VA, or USDA loan holders with rates below current market
    • Sellers who can wait 60-90 days for the assumption process*
    • Sellers wanting to maximize sale price

    Pros:

    • Potential for significant premium pricing (over 5% above market comps)
    • The low rate becomes a major selling point
    • Buyers save hundreds per month compared to new financing
    • Complete release from mortgage liability
    • With specialized platforms, faster time to sale

    Cons:

    • Longer closing timeline (60-90 days is typical)*
    • Buyer must have cash or secondary financing for equity gap

    *Assumption Timeline & Financing Note: While traditional assumptions take 60-90+ days when working directly with lenders, platforms that specialize in assumable mortgages (like Roam) have streamlined the process significantly. With dedicated assumption teams, lender relationships, and pre-qualified buyer networks, closings can happen in as little as 45 days, with qualified offers typically arriving within 30 days of listing. Additionally, Roam buyers can access secondary financing options with down payments as low as 5%, making assumptions accessible to a much broader pool of qualified buyers.

    Why this matters in 2026:

    With current mortgage rates above 6% (see this week's rates here), if you locked in a rate between 2.5-4% during 2020-2022, your mortgage is exceptionally valuable.

    Example comparison:

    • Your FHA loan: $350,000 at 3% = $1,475/month (principal & interest)
    • New mortgage: $350,000 at 6.5% = $2,212/month (principal & interest)
    • Buyer's monthly savings: $737
    • Annual savings: $8,844
    • 30-year savings: $265,200+

    Buyers are often willing to pay a premium for your home to access these savings. [Learn how to maximize your sale price with our complete guide to selling with an assumable mortgage →]

    Option 3: Short Sale (When You Owe More Than Home Value)

    This option applies only when you're "underwater” (owing more than your home is currently worth).

    How it works:

    • You negotiate with your lender to accept less than the full mortgage balance
    • Requires extensive documentation of financial hardship
    • Lender must approve the sale price and terms
    • May result in tax implications or credit impact

    Best for:

    • Sellers facing financial hardship
    • Homes that have lost significant value
    • Situations where foreclosure is the alternative

    Pros:

    • Avoids foreclosure
    • May be better for credit than foreclosure
    • Gets you out of an unaffordable situation

    Cons:

    • Lengthy approval process (3-6+ months)
    • Significant credit impact (though less than foreclosure)
    • No proceeds for the seller
    • Potential tax liability on forgiven debt
    • Not guaranteed to be approved

    Important note: Short sales are relatively rare in 2026's market. Most homeowners who purchased before 2022 have substantial equity due to home price appreciation over the past several years.

    Understanding Your Equity Position

    Before deciding which selling option to pursue, calculate your equity:

    Home Equity = Current Home Value - Remaining Mortgage Balance

    Example calculations:

    Scenario A: Strong Equity Position

    • Current home value: $500,000
    • Remaining mortgage: $320,000
    • Your equity: $180,000
    • After 6% in closing costs/commissions: ~$150,000 net proceeds

    Scenario B: Moderate Equity Position

    • Current home value: $400,000
    • Remaining mortgage: $360,000
    • Your equity: $40,000
    • After closing costs: ~$16,000 net proceeds

    Scenario C: Underwater Position

    • Current home value: $350,000
    • Remaining mortgage: $380,000
    • Your equity: -$30,000 (you owe more than it's worth)
    • Short sale or bring cash to closing

    How to determine your current home value:

    • Recent comparable sales in your neighborhood
    • Professional appraisal
    • Realtor comparative market analysis (CMA)
    • Online estimators (gives a ballpark)

     

    The Assumable Mortgage Advantage: A Deeper Look

    If you have an FHA, VA, or USDA loan, you need to understand the significant advantage you may be sitting on. [Read our comprehensive assumable mortgage seller guide for detailed strategies and step-by-step instructions →]

    Which Loans Are Assumable?

    Assumable by law:

    • All FHA loans originated after December 1, 1986
    • All VA loans (no date restriction)
    • All USDA loans

    Not assumable:

    • Conventional loans (with rare exceptions)

    How Much Premium Can You Realistically Capture?

    The premium depends on several factors:

    1. Rate Differential

    The bigger the gap between your rate and current rates, the more valuable your loan.

    2. Remaining Balance

    A larger remaining balance means more monthly savings for the buyer, which justifies a higher premium.

    3. Remaining Term

    More years remaining means more total savings. A loan with 27 years left is worth more than one with 10 years remaining.

    4. The Equity Gap

    The difference between your sale price and remaining loan balance affects how many buyers can qualify*:

    • Small gap (under $75K): Larger buyer pool, potentially more competition
    • Moderate gap ($75K-$150K): Qualified move-up buyers and investors
    • Large gap (over $150K): Limited to cash-heavy buyers, may reduce premium

    *Platforms like Roam offer secondary financing that allows qualified buyers to cover the equity gap with as little as 5% down. This has transformed the assumable mortgage market by making these sales accessible to a much broader range of qualified buyers.

    The Assumption Process: What to Expect

    Traditional assumptions typically take many months due to:

    • Difficulty finding assumption-qualified buyers (most aren't actively searching for assumable mortgages)
    • Lender assumption departments with 45+ day processing times from complete application
    • Documentation back-and-forth without expert coordination
    • Limited buyer pool when marketing isn't targeted to assumption buyers

    Roam streamlines this dramatically due to:

    • Pre-qualified network of buyers actively seeking assumable mortgages
    • Established lender relationships for faster processing
    • End-to-end management of assumption paperwork and documentation
    • 45-day closing guarantee backed by experienced assumption specialists

    The typical Roam Process:

    Week 1-3: List

    Your Roam Agent lists your home and the assumable loan attracts 5X more offers than traditional listings

    Week 3-4: Contract

    You accept an offer within 30 days and your Roam Agent drafts all sale and loan paperwork

    Week 4-10: Close

    Within 45 days the sale is finalized, you are paid out, and your loan is transferred to the buyer.

     

    Buyer Qualification for Assumptions

    Buyers must meet two requirements:

    1. Lender Qualification

    • Credit score: typically a minimum of 580
    • Income verification and employment history
    • Debt-to-income ratio: usually under 43%
    • Similar standards to obtaining new financing

    2. Funds for Equity Gap + Closing

    • Cash for the equity gap (price minus remaining loan balance)
    • Additional 2-3% for closing costs
    • Sometimes 3-6 months reserves

    How buyers cover the equity gap:

    Option A: Cash (most common)

    • Buyers from home sales with equity
    • Investors with liquid capital
    • High-income savers

    Option B: Second Mortgage

    • Secondary loan for part of the gap
    • Typically 8-12% interest rates
    • The "blended rate" between the assumed mortgage + the second mortgage is often still below current mortgage rates

    Option C: Seller Financing

    • The seller finances part of the equity gap
    • Typical terms: 6-9% interest, 5-10 years

    Option D: Roam's Secondary Financing

    • Roam offers secondary financing specifically designed for equity gaps
    • Down payments as low as 5% of the gap amount
    • Makes assumptions accessible to more buyers

     

    So which option is right for you?

    If you have a low-rate FHA, VA, or USDA loan, the assumable mortgage route is almost always worth pursuing. You could add tens of thousands of dollars to your proceeds and sell faster than you would otherwise.

    For those with conventional loans, the traditional sale path is straightforward.

     

    Next Steps: Preparing to Sell

    1. Determine Your Mortgage Type and Remaining Balance

    Contact your loan servicer and request:

    • Current principal balance
    • Interest rate
    • Monthly payment breakdown
    • Loan type (FHA, VA, USDA, conventional)
    • Payoff quote (good for 30 days)
    You can also share your loan details with Roam—we'll verify that your loan is FHA/VA/USDA and confirm it's eligible for assumption

    2. Estimate Your Home's Current Value

    Standard valuation methods include:

    • Recent comparable sales in your neighborhood
    • Online home value estimators
    • Real estate agent comparative market analysis (CMA)
    • Professional appraisal

    However, if you have a home with an assumable mortgage, standard valuation methods miss an important factor: your low-rate loan. Share your address with Roam to estimate the premium your assumable loan could add to your sale price.

    3. Calculate Your Potential Proceeds

    Simple formula:

    Estimated Sale Price

    – Remaining Mortgage Balance

    – Agent Commissions (5-6%)

    – Closing Costs (2-3%)

    = Your Net Proceeds


    Example:

    $450,000 (Estimated Sale Price)

    – $320,000 (Remaining Mortgage Balance)

    – $30,000 (Agent Commissions + Closing Costs)

    = $100,000 (Your Net Proceeds)


    4. Evaluate Your Best Option

    Ask yourself:

    • Do I have an assumable mortgage (FHA/VA/USDA)?
    • What's the difference between my loan and current rates?
    • How much equity do I have?
    • What's my timeline for selling?
    • Am I willing to work with a specialized platform to potentially earn over 5% more?

    5. Consult with Professionals

    If you have an assumable low-rate FHA, VA, or USDA loan:

    Consider using an agent or platform that specializes exclusively in assumable mortgages. Most traditional real estate agents have never completed an assumption transaction and don't know how to properly value or market your low-rate loan. This is why many sellers with valuable assumable mortgages leave tens of thousands of dollars on the table.

    Platforms like Roam solve this by:

    • Free valuation that calculates your home value + loan premium
    • Agents trained specifically in assumption sales and marketing
    • Network of buyers actively seeking assumable loans
    • End-to-end assumption process management

    If you have a conventional loan:

    • Interview local real estate agents with strong track records to compare their marketing plans, commission structures, and verify they understand your local market.

     

    The Bottom Line

    Selling a house with a mortgage is not only possible—it's normal. Most home sellers still have a mortgage when they sell.

    Your decision is straightforward:

    • Traditional sale: Works for everyone with conventional loans or those needing a quick close
    • Assumable mortgage sale: For FHA/VA/USDA loans—can add over 5% to your proceeds
    • Short sale: Only if you're underwater (rare in 2026's market)

    The bottom line for 2026: If you locked in a low rate during 2020-2022 with an FHA, VA, or USDA loan, you're sitting on significant value. With the right expertise (like Roam's specialized platform), you can capture that value by getting over 5% more for your home in as little as 30 days.

     

    Common Questions About Selling a House with a Mortgage

    Can I sell my house if I still owe money on it?

    Yes, absolutely. This is normal: 60-70% of home sellers still have a mortgage. At closing, your loan is paid off from the sale proceeds, and you receive the difference. The only exception is if you owe more than your home is worth (underwater), in which case you'd need to bring cash to closing or pursue a short sale.

    How do I know if my mortgage is assumable?

    Check your loan type: FHA, VA, and USDA loans are assumable by law. Conventional loans typically are not.

    You can verify by:

    • Reviewing your mortgage documents for loan type
    • Calling your loan servicer directly and asking, "Is my loan assumable?"
    • Sharing your loan details with Roam—we'll verify that your loan is FHA/VA/USDA and confirm it's eligible for assumption

    *Note for VA loan sellers: [Understand how assumptions affect your VA entitlement and how to protect your benefits →]

    How long does it take to sell a house with a mortgage?

    Traditional sales typically close in 30-45 days. If you have an assumable FHA, VA, or USDA loan and choose to market it, the process traditionally takes several months when working directly with lenders. However, platforms specializing in assumptions (like Roam) can close in just 45 days—the same as a traditional sale.

    How much will I make selling my house with a mortgage?

    Your net proceeds = Sale price - Remaining mortgage balance - Closing costs (typically 6-8%).

    For example, if you sell for $450,000, owe $320,000, and pay $30,000 in costs, you'd net $100,000. If you have an assumable FHA, VA, or USDA loan, you could get over 5% more for selling your home with your low rate loan.

    Ready to See What Your Home Is Worth?

    If you have an FHA, VA, or USDA loan your assumable mortgage could add significant value to your sale price.

    Roam specializes in assumable mortgage sales:

    • Free home valuation including your rate advantage
    • 5X more offers from pre-qualified buyers
    • 30-day offer guarantee
    • 45-day closing guarantee
    • Expert agents who manage the entire process

    All at no cost to you. Get your free valuation at withroam.com/sellers

    About This Guide

    This guide provides general information about selling homes with mortgages as of January 2026. Specific processes, timelines, and options may vary based on your lender, location, and individual circumstances. Consult with qualified real estate and financial professionals for personalized advice.

    Last Updated: January 29, 2026

    Sources:

    About Roam: Roam is the leading platform for assumable mortgage listings, helping buyers find homes with below-market interest rates and navigate the mortgage assumption process from start to finish, and sellers expertly market their low-rate loan to sell faster and for more. Our mission is to make homeownership more affordable by unlocking opportunities that already exist in the market.