Can I Sell My House for Cash If I Have a Mortgage?

How It Works

Example Calculation

What If I Owe More Than It's Worth?

If you're "underwater" (owe more than the house is worth), you have options:

• Short sale - We negotiate with your lender to accept less than owed
• Bring cash to close - Pay the difference yourself
• Deficiency negotiation - Work with lender to waive remaining balance

We've helped many homeowners in this situation. Learn more about selling when facing foreclosure.

The Payoff Letter Process

When you sell your home, the title company requests a payoff letter (also called a payoff statement) from your lender. This document shows the exact balance owed as of a specific date, including your principal balance, accrued interest through the expected closing date, and any outstanding fees. Payoff amounts are typically valid for 10 to 30 days. If closing gets delayed, the title company orders a new one.

You don't need to contact your lender yourself. The title company handles the request, receives the letter, and wires the payoff amount directly to your lender from the sale proceeds at closing. Whatever's left after the mortgage payoff, closing costs, and any other liens goes to you.

Prepayment Penalties

Some mortgages include prepayment penalties for paying off the loan early. These are most common in loans originated between 2005 and 2008, as well as hard money loans and certain adjustable-rate mortgages. In Florida, prepayment penalties are legal but must be clearly disclosed in your loan documents.

Typical penalties range from 1% to 3% of the remaining loan balance. On a $200,000 balance, that's $2,000 to $6,000. FHA and VA loans don't carry prepayment penalties. If you're unsure whether your mortgage has one, check your original promissory note or call your loan servicer. The title company will factor any penalty into the closing settlement, so there are no surprises at the table.

What About a HELOC or Second Mortgage?

If you have a home equity line of credit (HELOC) or a second mortgage, those get paid off at closing too. The title company orders payoff letters for every lien recorded against the property. Liens are paid in order of priority: the first mortgage gets paid first, then any second liens, then you receive whatever remains from the sale proceeds.

If the sale price doesn't cover all outstanding liens, you're looking at a short sale, where your lender or lenders agree to accept less than what's owed. We handle short sale negotiations regularly and can walk you through the process from the first phone call to closing day.