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

Falling behind on mortgage payments can be incredibly stressful and challenging. The constant worry about the potential foreclosure process, mounting late fees, and the strain on your financial stability can be overwhelming. This situation can also affect your credit score, making securing future loans or financial assistance harder. 

But don’t you worry! There are solutions to this predicament; one effective strategy is selling your house.

Even if you’re behind on payments, selling your home can be a viable way to regain control of your finances and avoid foreclosure. By selling it for cash, you can pay your missed mortgage payments. And if the deal is profitable, you can potentially walk away with some equity for a fresh financial start.

A-List Properties is a valuable resource for homeowners in this situation. They specialize in helping individuals who need to sell their homes quickly, offering competitive cash offers regardless of the property’s condition.

The process is quick and hassle-free. They aim to provide a straightforward solution for those facing financial instability. 

In this article, we’ll explore how selling your house can be a solution if you’re behind on payments. We also tell you how A-List Properties can help you avoid foreclosure and navigate the sale smoothly.

Can You Sell Your House if You’re Behind On Your Mortgage?

Yes, you can sell your house if you’re behind on your mortgage. Selling your home to a cash buyer can be a practical solution to mitigate financial stress and avoid a foreclosure notice. 

When you are behind on mortgage payments, acting quickly is crucial to prevent further financial repercussions. Here’s how the process works:

Feasibility of Selling

When you’re struggling with a mortgage loan, selling your home can be a feasible solution to alleviate financial stress. One option to consider is a “short sale.” 

In a short sale, your lender agrees to let you sell the house for less than what you owe on the mortgage payments. This process can help you avoid foreclosure, though it may affect your credit score. 

It’s important to note that while a short sale can be a viable solution, it requires cooperation from your lender and may take longer than a traditional sale.

Selling “As-Is”

Selling your house “as-is” can be particularly beneficial during financial situations. This means you sell the property in its current condition without making any repairs or upgrades. These can be especially burdensome if you struggle to make mortgage payments. 

Selling “as-is” can save you time, effort, and money, often in short supply when dealing with financial difficulties. This approach lets you quickly offload the property and move forward with your life without the burden of repair costs.

A-List Properties specializes in hassle-free and fast home sales, making cash offers for homes in any condition. 

Mortgage Payoff Requirement

When selling your home, the proceeds from the sale must be used to pay off the remaining mortgage balance. This is a crucial requirement regardless of your financial situation.

If your home is “above water,” you can sell it, pay off the loan, and potentially walk away with some equity. However, as previously mentioned, a short sale may be necessary if your home is “below water.” 

In both scenarios, the goal is to settle the outstanding mortgage debt and alleviate your financial burden.

Communication with Mortgage Servicer

Communication with your mortgage servicer is essential when you’re behind on payments. Discussing your situation with them can reveal several potential solutions, such as mortgage forbearance or refinancing.  

These solutions can provide temporary relief or a more sustainable path to resolving your financial issues. Professionals like A-List Properties can help you navigate the complexities of the sale and find a solution that best fits your financial situation. 

What Do Above Water and Below Water Mean?


Being “above water” in mortgage terms means that the market value of your home is greater than the remaining balance on your mortgage. In this situation, selling your home to a cash buyer can be a significant advantage.

  • You have positive equity, the difference between your home’s fair market value and the amount you owe on your mortgage.
  • You won’t need lender approval for a short sale, and potential buyers will likely be interested in a home with clear financial standing.
  • The proceeds from the sale can be used to settle other debts, invest in a new home, or improve your overall financial situation.

Being “below water,” also known as being “underwater,” means that the market value of your home is less than the remaining balance on your mortgage. This can complicate the selling process. Here’s how:

  • In this scenario, you have negative equity, meaning you owe more on your mortgage than your home is worth.
  • A short sale involves selling property for less than the mortgage balance.
  • Selling a below-water property typically requires lender approval for a short sale.
  • Buyers may be wary of short sales due to the longer approval process and potential complications.

You can navigate these complexities more efficiently by working with companies like A-List Properties. They specialize in above-water and below-water scenarios and can provide tailored solutions to help you achieve financial stability.

Market Dynamics

Home values are influenced by various factors, including interest rates and overall market conditions.

For example, lower interest rates generally make borrowing cheaper, increasing demand for homes and prices. Conversely, higher rates can reduce demand and lower home values. 

Market conditions, such as those during the 2008 financial crisis, profoundly impacted home values. During this period, many homeowners found themselves underwater as home prices plummeted, and the value of their properties fell below their mortgage payments. 

Understanding these dynamics is crucial for making informed decisions about buying, selling, or refinancing your home.

Alternatives to Selling Your Home When Underwater

When facing the challenge of being underwater on your mortgage, selling property may not always be the only solution. Here are some alternatives to consider: 

Loan Modification

One alternative to selling your home when underwater is pursuing a loan modification with your lender. 

With a loan modification, you can renegotiate the terms of your mortgage so that your payments are manageable. This could include lowering the interest rate, extending the loan term, or reducing the principal balance. 

By adjusting these terms, you may be able to lower monthly payments and avoid the need to sell your home. 


Mortgage forbearance allows you to temporarily pause or reduce your mortgage payments during financial problems. This can provide much-needed relief for those facing short-term financial difficulties, such as job loss or medical emergencies.

However, it’s important to note that forbearance is typically a temporary solution and does not eliminate the mortgage payment. 


This option involves replacing your current mortgage with a new loan, ideally at a lower interest rate or better terms. This can help you reduce monthly payments and potentially save money over the life of the loan. 

Refinancing is an attractive option for those who qualify and can provide long-term financial stability.

Renting Out Your Home

Renting your home out can be a viable income source to cover missed payments. By becoming a landlord, you can leverage rental income to offset your expenses and potentially turn a profit.

Plus, it enables you to retain property ownership and benefit from future appreciation. 

However, this option requires careful consideration of rental market conditions, property management responsibilities, and legal obligations. To explore this option, consult with a real estate agent specializing in rental properties.  


Bankruptcy is a last resort option for homeowners facing overwhelming debt and financial hardship. Filing for bankruptcy can provide immediate relief from creditors and the foreclosure process. It gives you time to restructure your finances and potentially keep your home. 

That said, bankruptcy can have long-term implications for credit and financial stability. It also comes with significant consequences, such as potential asset loss. 

It’s essential to consult with a qualified bankruptcy attorney to explore this option thoroughly.

Deed in Lieu of Foreclosure

When you sign a deed in Lieu of foreclosure, you transfer the ownership of the property to the mortgage company to avoid the foreclosure process. The option may help you avoid the foreclosure process, but it still has negative implications for your credit scores and financial futures.

Moreover, lenders may not always accept a deed in lieu of foreclosure. You must weigh all the pros and cons before settling for this option.

Should You Sell Your Home If You’re Behind on Mortgage Payments?

a woman using her laptop

Deciding whether to sell your home when you’re behind on mortgage payments is a significant decision that depends on several factors.

Assess Your Financial Situation

First, evaluate your overall financial situation. You can hire a financial advisor or real estate agent to help you assess. 

If your financial problems are temporary and you anticipate being able to catch up on missed payments soon, consider options like forbearance or renting. 

However, if your financial situation is long-term or worsening, selling your home could be a way to relieve your financial burden and avoid a foreclosure notice.

Home Equity Considerations

Consider whether your home has positive equity. If you’re above water, selling property to a cash buyer will pay off your mortgage loan and potentially leave you with additional funds to start fresh. 

If you’re underwater, a short sale is a viable option, but you’ll need lender approval, and it can impact your credit score.

Credit Score Implications

The decision to sell your home can significantly affect your credit score. Selling it at current market value generally has the most negligible impact on your credit. 

In contrast, a short sale or foreclosure can considerably lower your credit score, making it challenging for you to secure loans or credit in the future.

Explore Other Options

Make sure you explore other potential solutions before deciding to sell your home. Refinancing your mortgage or a loan modification might help you retain your home. 

Discuss these options with your mortgage servicer to see if they can provide the relief you need.

Stress and Overwhelming Situations

Dealing with the possibility of losing your home can be incredibly stressful and overwhelming. It’s essential to address the emotional toll this situation can take. 

Seek support from friends, family, or professional counselors who can help you cope and make rational decisions. 

Why Choose A-List Properties

modern brick home

A-List Properties specializes in making the home-selling process as smooth as possible. They understand the urgency of selling your home, especially if you’re behind on mortgage payments, and are committed to closing deals quickly.

They provide competitive cash offers for homes in any condition, so you can sell your home without any worries.

The team at A-List Properties is dedicated to providing professional assistance and compassionate service. They recognize that you may face financial distress and strive to make the selling experience as stress-free as possible. 

How to Get Started

Contact us today and provide some basic information about your property and situation.

Arrange a convenient time for a representative from A-List Properties to visit your home and conduct a thorough evaluation.

After the evaluation, A-List Properties will present you with a competitive cash offer for your home. You are not obligated to accept the offer immediately, so you can consider your options.

If you accept the offer, A-List Properties will handle the entire process, including all necessary paperwork and logistics. You can expect to close the sale in days rather than weeks or months.


When you’re behind on mortgage payments, evaluating all available options is crucial before deciding to sell your home. Each situation is unique, and considering various solutions can help you make the best decision for your financial well-being.

Seek expert advice from a financial advisor, real estate agent, or mortgage lender. They can offer guidance tailored to your specific circumstances.

If selling your home to a cash buyer is the best route, A-List Properties stands ready to provide an efficient selling experience. They will pay you in cash, which will help you take the first step toward a brighter financial future.

Sell My House Fast Texas | We Buy Houses Texas

Zach Shelley

Zach Shelley is a seasoned real estate investor with a diverse network spanning across the nation. As the founder of his own real estate venture, Zach is committed to offering innovative solutions to homeowners facing various real estate challenges.. Through his dedication and strategic approach, Zach continues to make a significant impact in the real estate industry, providing homeowners with alternative pathways to navigate their property transactions.

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