A: It’s pretty simple to sell your home while it is still subject to a mortgage. All you need to do is obtain a payoff letter from your servicer/lender prior to closing. The title company will require this document in order to close. The title company will pay the servicer/lender the balance of the loan (as listed in the payoff letter) once closing is complete, and you will receive the remainder of the sales price, known as proceeds (minus any fees, commissions, taxes, etc). If there is not enough money to pay the balance of the mortgage, you will need to obtain approval from your lender to sell the property as a short sale. The short sale approval process can take weeks to months, so it’s important to determine whether you will need to go through the short sale process, prior to selling your home.

Your lender should then record a Release of Mortgage with the County recorder’s office. Sometimes releases are not recorded, so make sure to keep a copy of any documentation that the lender sends you post-closing, in case you have to prove the mortgage was paid off at a future date.