Selling a house with an outstanding mortgage: complete guide

Do you have an outstanding mortgage but want to sell your house? No problem. Here are all the solutions for selling a mortgaged property.

Can I sell a house with an outstanding mortgage?

Yes, it is absolutely possible to sell a property with an outstanding mortgage. The important thing is to follow one of the procedures provided for by Italian law, informing the buyer and involving the bank.

The two options are:

1. Paying off the mortgage at the time of the deed

2. The buyer taking over the mortgage

1. Paying off the mortgage at the time of sale

This is the most common practice: part of the sale price is used to pay off the remaining debt with the bank.

How it works:

1. The seller asks their bank for a settlement statement, which indicates the exact amount to be paid to settle the mortgage

2. On the day of the deed, the buyer pays the agreed price; part of this is used to pay off the mortgage

3. The bank issues a release receipt and authorizes the cancellation of the mortgage

Please note: it is important that the mortgage is canceled immediately after the mortgage is paid off to ensure that the buyer receives a property free of encumbrances.

Once the mortgage has been paid off, the mortgage must be formally canceled from the property registers. There are two ways to do this:

• Simplified procedure (automatic and free of charge): activated automatically by the bank for residential mortgages, cancellation takes place within 30 days

• Notarial deed of cancellation: if the bank cannot proceed automatically or if you wish to speed up the process, you can use a notary (at the seller's expense)

2. Assumption of the mortgage

As an alternative to repayment, it is possible to sell the house with the assumption of the mortgage. In this case, the buyer takes over the existing contract with the bank.

Types of assumption:

• Cumulative assumption: the seller remains liable for the mortgage together with the new owner

• Liberatory assumption: the seller is completely released from all obligations, but the explicit consent of the bank is required

What documents are needed to sell a house with a mortgage?

• Original mortgage contract
• Updated settlement statement
• Bank payment receipt (after settlement)
• Consent to the cancellation of the mortgage
• Any assumption agreement (if applicable)

Conclusion

Selling a house with an active mortgage is possible, but it requires good planning. Whether you choose to pay off the debt or opt for assumption, the important thing is to act transparently and follow the correct procedure with the bank, notary, and buyer.