Yes, you can sell a house even if you have a mortgage. In fact, most home sales involve a mortgage being paid off as part of the transaction. The process is straightforward, but it does involve specific steps that ensure your lender is paid the remaining balance when the home changes hands.

When you decide to sell your home, the first thing you should do is contact your mortgage lender. Ask for a mortgage payoff statement. This document will show exactly how much you owe, including any interest that will accrue up to the projected closing date. This payoff amount is essential because it determines how much of the sale proceeds must go toward settling your debt.

Once your home is sold, the mortgage will be paid off directly from the buyer’s funds at closing. The closing attorney or title company handling the transaction will use the money from the buyer to pay the lender the amount shown on the payoff statement. After that is complete, any remaining money from the sale goes to you, minus other closing costs like agent commissions and legal fees.

If your home sells for more than what you owe, the difference is your equity. You can use this money as a down payment on another home, invest it, or use it however you wish. However, if the home sells for less than what you owe on the mortgage, you are in what’s called a negative equity or “underwater” situation. In that case, you will need to bring money to the table to make up the difference, or negotiate a short sale with your lender, which requires their approval and comes with its own complications.

It’s also important to consider any penalties or fees that may come from paying off your mortgage early. Some loans include early repayment fees, though these are less common today. Check your loan agreement or ask your lender to be sure.

The key takeaway is that having a mortgage does not prevent you from selling your home. It simply means the sale must first satisfy the loan. As long as the sale price is high enough to cover what you owe, the process is routine and legally supported. Working with a real estate agent and a closing professional can help make sure all details are handled smoothly and correctly.