Cash home buyers in Memphis often work with sellers who still have a mortgage, and the good news is—you can absolutely sell even if you still owe money on your home. Thousands of Memphis homeowners do this every year. The key is understanding how loan payoffs, equity, and the sales process work—especially if you’re selling to a cash buyer.
This guide will walk you step by step through everything you need to know. You’ll see a payoff statement example, learn how a net sheet calculator works, and find answers to the most common lender-related FAQs.
Can You Sell a House With a Mortgage?
Yes. Having a mortgage does not prevent you from selling your home. When you sell, the loan doesn’t transfer to the buyer—it gets paid off in full at closing.
Here’s what happens:
- You accept an offer (cash or financed).
- The title company contacts your lender for a payoff statement.
- At closing, your mortgage is paid off first.
- You keep the remaining equity (the profit after all fees and debts).
How Mortgage Payoffs Work
When you agree to sell, the title company asks your lender for a payoff statement—a document that shows the exact balance needed to pay off your mortgage on the day of closing.
It usually includes:
- Loan balance
- Interest due (up until payoff date)
- Fees (like late charges)
- Escrow adjustments (taxes or insurance owed)
Example of a Payoff Statement
- Principal loan balance: $120,000
- Interest due: $450
- Late fees: $50
- Escrow shortage: $200
Total payoff: $120,700
At closing, the title company will send this amount directly to your lender. Only after that do you receive your equity.
What Is Equity?
Equity is the portion of your home’s value that you actually keep after debts and costs.
Equity = Sale Price – Loan Payoff – Closing Costs
Example:
- Sale price: $200,000
- Mortgage payoff: $120,700
- Closing costs: $5,500
Net proceeds = $73,800
That’s the money that gets wired into your bank account after closing.
Using a Net Sheet Calculator
A seller’s net sheet is a tool that estimates how much you’ll walk away with after selling. It includes:
- Your sale price
- Loan payoff amount
- Closing fees
- Realtor commission (if using an agent)
- Taxes or liens
Why It’s Useful
It gives you a realistic preview of your profit, so you’re not surprised on closing day. Most Memphis title companies or agents can prepare one for free.
Selling With a Mortgage to a Cash Buyer
If you want speed and simplicity, selling to a cash buyer is often the best choice. Here’s why:
- No bank delays. The buyer isn’t waiting for loan approval.
- Fast timeline. Many cash buyers close in just 7–10 days.
- Guaranteed payoff. Your mortgage is paid in full at closing.
Typical Timeline With a Cash Buyer
- Accept cash offer → usually within 24–48 hours.
- Title company requests payoff statement.
- Closing set for 1–2 weeks later.
- Lender is paid.
- You receive equity (often same day or next business day).
This process is much quicker than waiting 30–60 days for a financed buyer.
Lender FAQ: Selling With a Mortgage in Memphis
Q: What if my home sells for less than I owe?
A: You’d either pay the difference at closing or ask your lender for a short sale (special approval to sell below balance).
Q: Can I sell if I’m behind on payments?
A: Yes, but missed payments, fees, and penalties will be added to your payoff balance.
Q: Do I have to tell my lender right away?
A: No. The title company will contact them for payoff details once you’re under contract.
Q: What if I have two mortgages or a HELOC?
A: Both balances must be paid off at closing before you get proceeds.
Q: How quickly do I get my equity after closing?
A: Typically within 24–72 hours, depending on your title company and bank.
Benefits of Selling With a Mortgage
- Flexibility. You don’t have to wait until the loan is paid off.
- Cash in hand. Your equity becomes liquid money.
- Fast sales possible. Especially with a Memphis cash buyer.
Things to Watch Out For
- Prepayment penalties. Rare today, but check your loan terms.
- Accrued interest. Payoff amounts can rise slightly if closing is delayed.
- Closing costs. Always review your net sheet so there are no surprises.
Walkthrough Example: Selling a Memphis Home With a Mortgage
Let’s say you’re selling a Midtown Memphis house for $250,000.
- Current mortgage balance: $155,000
- Interest and fees: $600
- Closing costs: $6,500
Net proceeds: $87,900
At closing:
- Title company pays your lender $155,600.
- Pays $6,500 in closing fees.
- Wires $87,900 to you within 1–2 days.
It’s that simple.
Final Thoughts
Selling a house in Memphis with a mortgage isn’t complicated. The steps are clear:
- Your title company requests a payoff.
- Your lender is paid first.
- You keep the remaining equity.
Whether you’re behind on payments, relocating, or simply ready to move on, selling with a mortgage is completely doable. And if speed is important, cash buyers can help you close in as little as a week.