Can you sell your house for less than you owe and make payments on the remainder?

Question

if not is that the reason for so many fore closures?

Answer 1

Yes, it is called a short sale.  But you must have personal financing for the difference in the sale to make monthly payments.  Good luck

Answer 2

I've heard of people selling for less than they owed, and bringing money to the closing.

I doubt you could just keep paying on your old mortgage, as you'd no longer be in possession of the collateral for that mortgage.

But if you're really hosed, I suppose you could take out a loan for say $20,000 then sell your house for $20,000 less than what you owe, use the $20,000 from the new loan to pay off the rest of your old mortgage at closing, and then make payments on the new $20,000 loan.  But if you're in a situation like that, bankruptcy/foreclosure might or might not also be something to consider.

Answer 3

yes but you must obtain an unsecured loan for the difference and bring it to closing so you can deliver good deed

I am a mortgage banker in TN & KY

Answer 4

no, you dont own the house the bank does they would not allow that

Answer 5

This is called a short sale and happens more and more every day. But you have to have permission from the bank and they will send their own appraiser out to make sure it's worth what you say.

Regarding the unpaid amount It's doubtful that the bank would make a deal for you to make payments on what is now an unsecured loan.

Many people simply walk away from the unapid balance but be careful the IRS might consider the unpaid amount as income.

Answer 6

No, because the bank won’t allow the sale unless they’re paid in-full. Once your house is gone, they don’t have any collateral to make sure the rest of the loan is satisfied.

Answer 7

Usually you have to pay the whole amount when you sell the house. But you should be able to negotiate with the lender. And if the lender sees that your offer is reasonable he might agree. In some cases the lender might agree to settle for less if he sees that it is better than foreclosing on the house. But if the seller has a high paying job or other assets then the lender most probably will not agree for the settlement. It all depends on the state laws and customs. So talk to an attorney and your lender.

Answer 8

In mortgage you have to first pay up the difference amount, then sell the house in a way that the buyer pays the mortgage directly to the creditor.   That is the only way you will rid yourself of the debt cleanly.

Answer 9

NO; that is not acceptable .

You cannot sell something that you owe on for less than you owe and continue to pay the remaining balance ....

You will need to at least sell the property for what you owe PLUS the closing cost ect ......