Can I Sell My House If I'm Still Paying It Off? How It Works in Texas

Because a lot of what comes up online answers a different question in a different place. Rules from another state or another country, advice written for a different kind of loan, or a friend's story that wasn't quite what it sounded like. Texas works its own way, and it's simpler than it looks.

You don't need to pay the house off before you list it. You don't need your lender's permission to sell it either. Your loan gets paid off as part of the sale.

Here it is, in order:

1. You accept an offer and sign the contract. The contract goes to a title company. In Texas, the title company holds the money for the sale and makes sure the house passes cleanly to the new owner.
2. The title company checks what's owed on the house. It looks for your mortgage, any second loan, and any unpaid bill that's been recorded against the property.
3. The title company asks your lender for the payoff. That's not the balance on your monthly statement. The payoff is what the lender charges to close out the loan on an exact date, with interest up to that day.
4. On closing day, the buyer's money arrives at the title company. From there, your lender is paid in full, the costs of selling are paid, and the house bills that run by the year, like property taxes, are split between you and the buyer.
5. Your lender releases the house. Once it's paid, the lender sends the document that removes its claim on the property, and that document is recorded with the county.
6. What's left is yours. It's sent to you once everything is signed and the buyer's loan funds (meaning their lender sends the money).

You don't carry a check to the bank or do the math by hand. But it pays to know your number well before you list.

Three things, and none of them commit you to anything:

• What your house is worth today. Not a number from a website, but one based on similar homes that actually sold near yours. You can request it at veronicayeary.com/home-value.
• About how much you owe. Call your lender and ask for a payoff quote for a specific date. That's enough for a first estimate.
• Whether anything else is tied to the house. A home equity line of credit, a loan for solar panels, a roof or other repairs. Those get paid off at the sale too, and it's much better to find them at the start than at the closing table.

With those three pieces, we can do the subtraction: sale price, minus what you owe, minus the costs of selling. That's what you walk away with.

Yes. Until closing day, the house is still yours and so is the loan. Keep making your regular payments. If you fall behind, late fees get added, and they come out of what you keep.

If your taxes and insurance are paid through your loan (an escrow account, where your lender collects a little each month to pay those bills), whatever is left in that account is usually refunded to you by the lender after the loan is paid off. And don't cancel your homeowner's insurance until the sale has closed.

It happens, and it's not the end of the conversation. There are a few options, each with its own steps:

• Bring the difference to closing, if you have it.
• Wait, if there's no rush, while the house gains value and the balance goes down.
• Ask the lender to accept less than what's owed, which is called a short sale. The lender decides that, not you and not me, and it takes longer.

Before deciding anything, start with the real numbers. Often people think they owe more than the house is worth, and once we look at today's value, the picture is better than they expected.

Yes, and it's very common. What you walk away with from the sale is often the down payment on the next home. I explain that in the down payment for your next house is in your current house.

The order matters. Talk to a lender first, so you know what you can buy in your situation, and then put the sign up. Here's why: talk to the lender before the sign goes up. And if you want to see how the plan comes together so you sell and buy without ending up with nowhere to live, it's on the sell and buy page.

Do I need a letter from my lender before I can list the house?

No. The title company requests your payoff once there's a contract. You only need a rough number so we can run the math ahead of time.

Can I sell my house and keep paying the mortgage?

Usually not. When the house sells, the loan is paid in full at closing and it ends. After the sale, you no longer owe that lender anything for that house.

Can my lender charge me for paying the loan off early?

Some loans have a charge like that, and many don't. Your loan documents say which. Ask your lender when you request the payoff so it isn't a surprise.

How much will I walk away with?

It comes down to three things: the sale price, what you owe, and the costs of selling. I'll help you with an estimate before you list, and the title company gives you the exact figure a few days before you sign. If you want to see everything that gets paid when you sell and buy in the same year, it's in the costs of selling and buying in the same year.

What if I have a second loan on the house?

It gets paid off at closing too, just like the first one. The title company finds it and requests a payoff for each.

Still paying on your house doesn't stop you from selling it. In Texas, your loan is paid from the sale money, the title company makes sure your lender gets what it's owed, and what's left is yours. The only thing you need from the start is your number: what the house is worth, what you owe, and what you'd keep.

Want to work out your number?

If you'd like to start on your own, request your home's value at veronicayeary.com/home-value. If you'd rather go through it together, call or text me at 469-441-8890, or email veronica@veronicayeary.com. No commitment, nothing to sign.

Veronica Yeary, Realtor®, CRS · ABR · SRS · CIPS, All City Real Estate DFW. I sell your home and find the next one with a single plan, with me from start to finish.

469-441-8890 · Call or text · veronica@veronicayeary.com · Email