Can I Sell My House if I’m Behind on Payments?

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Can I sell my house if I'm behind on payments

When you need to catch up on your mortgage payments, it’s stressful and overwhelming. Fortunately, options are available to help you catch up on payments and avoid losing your house through the foreclosure process.

Work with your loan servicer to discuss available options including: loan modification, forbearance, or repayment plans. If these options are not feasible for you, then it may be time to explore selling the house when you’re behind on payments.

In this blog, we’ll discuss the different solutions available. Keep reading to learn more about your options to sell your house if you’re behind on payments.

Selling Your House If You’re Behind On Your Payments

You need to understand the potential consequences of not paying your mortgage and the options available to you in this situation.

Potential Consequences of Not Paying Your Mortgage

If you are unable to make mortgage payments, you may face foreclosure or repossession of your home:

  • Foreclosure is a legal process allowing lenders to take back property if the borrower fails to make timely payments.
  • Repossession occurs when lenders take back possession of property without going through the court system.

Both foreclosure and repossession have long-term adverse effects on your credit score and ability to obtain future loans or mortgages.

Options Available When Behind on Mortgage Payments

When you are behind on mortgage payments, there are several options available to help you get back on track:

  • Refinance: Refinancing allows you to obtain a new loan with better terms than your current loan.
  • Loan Modification: Loan modification is an agreement between the lender and borrower that changes the terms of an existing loan to make it more affordable for the borrower.
  • Short Sale: A short sale occurs when a lender agrees to accept less than owed on the loan.

Preparing Your Home for Sale

Once you have decided that selling your home is the best option for getting out from under late mortgage payments, there are several steps you should take before listing it for sale:

  • Make any necessary repairs or upgrades to increase its value or appeal to potential buyers.
  • Clean up any clutter inside and outside your home to look presentable when potential buyers come by for showings or open houses.
  • Stage each room with furniture and decorations to create an inviting atmosphere for buyers who come by for showings or open houses.

Finding Qualified Buyers

Once your house is ready for sale, finding qualified buyers should be one of your top priorities, as they close quickly and pay cash if needed. To find qualified buyers, consider advertising online through classifieds websites such as Craigslist or Zillow, as well as local newspapers and magazines in print or online versions.

Another option is to reach out directly to investors who specialize in buying homes from people facing financial hardship due to late mortgage payments. These investors often have cash available, which makes closing easier and faster than traditional methods.

Above Water vs. Underwater

Real estate transactions involve a variety of payments, both above water and underwater:

  • Above water payments are paid in full, with no outstanding balance due on the property.
  • Underwater payments occur when the amount owed on the property is higher than its current market value.

Several factors contribute to a property being underwater or above water:

  • When interest rates rise, it causes the total amount owed on a mortgage to exceed the current market value of a home.
  • An influx of new homes in an area may cause existing properties to become less valuable and underwater.
Can I sell my house if I'm behind on payments

Can I Sell My House If I’m Behind On Payments?

If you need to catch up on payments, selling your house may be a viable option to help you get caught up. Before you begin the process of selling, it is essential to understand your current situation and the implications of selling your home.

Assess the state of your mortgage payments:

  • Are you several months behind or just one?
  • How much do you owe in total?
  • Consider any additional loans or liens associated with the property that could affect how much money you receive from the sale.
  • Check your credit score to determine the options for financing a new home if needed.

Explore the process of selling a house when behind on mortgage payments:

  • Working with a real estate agent or realtor
  • For Sale By Owner (FSBO)
  • Sell to a cash buyer

If you want to sell your house quickly without the hassle of a traditional sale, consider selling to a cash buyer. These buyers use their own money instead of a mortgage lender, which means you avoid a long sales process and move on soon after closing. You won’t have to worry about cleaning, repairs, or closing costs.

Weigh all available options before deciding how best to sell your home while behind on mortgage payments. Depending on your circumstances and future goals, one option may be more beneficial than another in getting caught up quickly while protecting yourself financially.

Alternatives To Selling Your Home When Behind On Your Payments

Various solutions are available to help people keep their homes and get back on track with their mortgages. Here is a list of alternative options for people behind on their home payments.

Government Assistance Programs

Government assistance programs provide financial aid to those in need. These programs may offer grants or loans that cover the cost of mortgage payments and other homeownership-related expenses. Eligibility requirements vary by program.

Refinancing Options

Refinancing your home loan lowers your monthly payments and makes them more manageable. This option allows you to take advantage of lower interest rates or switch from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage (FRM).

Negotiating with Lenders

Negotiating with lenders is an effective way to reduce your monthly payments or extend the term of your loan. Lenders don’t want a foreclosure, so they’ll be willing to work with you if you explain your situation and propose a solution that benefits both parties.

Loan Modification

Loan modification is another option for those struggling to make their mortgage payments. This process involves changing the terms of your loan agreement. Common modifications include:

  • Reducing the interest rate.
  • Extending the repayment period.
  • Lowering the principal balance owed on the loan.

Forbearance Agreements

Mortgage forbearance agreements allow borrowers to face temporary financial hardships beyond their control. The lender temporarily suspends or reduces mortgage payments without penalty. Both parties must approve the deal before it goes into effect, typically lasting between three and six months.

Deed-in-Lieu of Foreclosure

A deed-in-lieu of foreclosure occurs when the homeowner signs over ownership rights directly back to the mortgage servicer.


Filing for bankruptcy relieves debt obligations such as mortgages. There are two types of bankruptcies: Chapter 7, liquidation bankruptcy, and Chapter 13, reorganization bankruptcy. Bankruptcy will cause harm to your credit report, but you might be able to keep your home.

Selling Your Home

A home sale may seem like an extreme measure, but it could prevent further damage from occurring if done quickly enough. If you have missed payments due to job loss or financial hardship, selling your home could help alleviate some stress.

One option to consider as a home seller is a cash buyer. These buyers use their own funds and do not need to rely on a mortgage lender. They’ll make a fair cash offer and quickly close on your home.

Renting Out Your Home

Renting out your home could generate additional income towards paying off your mortgage balance. Homeowners need to understand the associated costs before taking this approach. Rental properties come with extra responsibilities, such as finding tenants, collecting monthly rent checks, and dealing with maintenance issues.

Short selling your house

Short Selling Your House

Short selling is an option for homeowners who owe more on their mortgage than the current market value of their home. It provides relief to your financial situation and helps homeowners avoid foreclosure. You’ll contact your mortgage company, make an agreement with them, and sell your property for less than the mortgage loan.

Reasons to Consider Short-Selling Your Home

There are several reasons why someone might consider short-selling their house. If you have missed mortgage payments or have been unable to make them on time, short-selling your home may be the best way to get out of debt.

Steps Involved in Short Selling Your Home

Once you have decided that short-selling your home is the best option for you, several steps are involved. Prepare your property for sale and market it effectively to attract potential buyers. Once offers start coming in, you will negotiate with prospective buyers and handle all paperwork associated with the sale.


Do you need to catch up on your house loan payments? It’s stressful, especially if you’re at risk of foreclosure. Fortunately, options are available to homeowners looking to sell their houses even if they’re drowning in mortgage debt.

You may be wondering how do I sell my home? A real estate investor may be the answer for you.

These buyers don’t require a mortgage lender because they have cash and have the ability to make an offer today. As a result, you won’t have to worry about a lengthy home-selling process. You’ll be able to sell your house quickly, skip the hassle of a traditional sale, and move on with your life.

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