Can I sell a house with a mortgage?

Do you have a house with a mortgage and want to sell it? In this guide, we explain when it is possible, what types of mortgages exist, and what practical solutions are available to complete the sale without risk.

Can I sell a mortgaged house?

Yes, it is possible to sell a mortgaged property, but it is essential that the buyer is aware of the existence of the mortgage and that a strategy is defined for the repayment or transfer of the debt.

If the mortgage is not canceled at the time of the deed, it will continue to encumber the property, even if the owner has changed. For this reason, it is essential to involve the creditor, in addition to the support of a notary, to ensure a transparent and secure transaction.

Types of real estate mortgages

Understanding the nature of the mortgage is the first step. Here are the main types:

• Voluntary mortgage: arises from an agreement between the debtor and the creditor
• Judicial mortgage: derives from a judgment imposing the payment of a debt
• Legal mortgage: is generated automatically on the basis of specific legal provisions Subcategories of this type are legal mortgages in favor of the seller and legal mortgages in favor of co-heirs, partners, and other co-owners

In all cases, a mortgage is a real right of guarantee that follows the property, not the person.

How to sell a house with a voluntary mortgage

This is the most common case, for example, when there is a mortgage loan. The solutions are:

• Pay off the mortgage at the time of the deed, using the buyer's down payment
• Have the buyer take over the mortgage with the bank's consent

It is important to obtain the creditor's consent and formalize the agreement with the support of a notary. The notary and the creditor must approve and formalize everything in the sales contract.

Solution 1: pay off the mortgage before the deed

The seller uses the proceeds from the sale (or part of it) to pay off the remaining debt, with the mortgage being canceled at the same time. This is the most straightforward and secure solution for both parties.

Solution 2: sale with mortgage and assumption of debt

The buyer assumes the existing debt (in agreement with the creditor) and undertakes to pay it. This can take place in two ways:

• Cumulative assumption: the buyer and seller are both liable
• Liberatory assumption: only the buyer is liable and the seller is released

What happens if I sell a mortgaged house?

When transferring ownership of a mortgaged residence, it is crucial to understand the consequences and effects involved.

The following may occur:

• The buyer acquires ownership of the home while maintaining the existing mortgage
• Or, if the principal debtor fails to comply with the obligations established with the creditor, the latter retains the right to initiate foreclosure proceedings on the property, even though the current ownership belongs to the buyer

To avoid problems before the sale:

• Inform the buyer from the preliminary stage
• Clarify with the notary and the creditor how to proceed
• Prepare all the necessary documentation
• Consult a notary or real estate expert
• Act with transparency and legal protection during all stages of the negotiation