Yes. Almost every home I sell in Lowell has a mortgage on it, and it causes no problem at all. Your mortgage does not need to be paid off before you sell. It gets paid off at the closing, out of the sale proceeds, as a standard line item on the closing statement.
How the Payoff Works
A few weeks before closing, your attorney or the closing attorney orders a payoff statement from your lender. That statement gives the exact amount needed to pay the loan in full through a specific date, including the final days of interest. At closing, that amount is wired to your lender directly from the proceeds, your loan is closed out, and the discharge gets recorded at the registry of deeds so the title is clean for the buyer. You never write a check. If you have a home equity line or a second mortgage, those are paid off the same way, and a home equity line must be closed entirely even if the balance is zero.
What If You Have More Than One Loan
Multiple liens are handled in order. Mortgages, equity lines, and any tax liens or judgments that attach to the property all get addressed at closing so the buyer receives clear title, which is a requirement of the sale. This comes up with older Lowell properties more often than people expect, sometimes a decades old equity line everyone forgot about, and it is routine work for a real estate attorney to clear.
What If You Owe More Than the House Is Worth
That is a different situation, called a short sale, and it does require planning. If the sale price will not cover the payoff and closing costs, your lender has to approve accepting less than the full balance, and that process takes time and paperwork. It is less common than it was years ago, but it happens, and the worst move is waiting until the last minute to face it. If you think you might be underwater on a home in Greater Lowell, call early. The earlier the conversation, the more options you have.
Do Not Stop Paying Because You Are Selling
Keep making your payments right up through the closing month. A missed payment during the sale damages your credit and can complicate the payoff, and your final payment timing is handled by the payoff figures anyway. If a payment comes due right around closing, ask the closing attorney how to handle it so you do not double pay. Any overpayment or escrow balance your lender holds comes back to you by refund after the loan closes out.
Prepayment Penalties and Loan Details
Most residential mortgages today have no prepayment penalty, but check your loan documents or ask your lender, especially if your loan is older or was a specialty product. Also confirm whether your loan is assumable. A few loan types can be assumed by a qualified buyer, and in a higher rate environment that can occasionally be a selling point worth mentioning in the right situation.
Your Equity Is the Number That Matters
Having a mortgage simply means your proceeds equal the price minus the payoff minus your selling costs. Sellers in South Lowell who bought two years ago and sellers in Belvidere who have paid a loan down for twenty years are in completely different equity positions at the same sale price, and that is what shapes your plans for the next move.
If you want to know what you would actually net after your mortgage is paid off, I will pair a free, no obligation home valuation with a net sheet estimate using your payoff figure. Call Doherty Properties at (978) 746-0124.
Chris Doherty is the #1 selling agent in Lowell, ranked #1 in the city again and again, including in 2024 and 2025, and he is one of Greater Lowell's top-producing agents. He personally sells 100+ homes a year, with 3,000+ career transactions, and Doherty Properties, the company he leads, has handled over $1 billion in real estate transactions.
Doherty Properties LLC, 14 Jackson Street, Lowell, MA 01852 | 160 Main Street, Unit 7, Haverhill, MA 01830 | 4 Courthouse Lane, Suite 2, Chelmsford, MA 01824 | (978) 746-0124 | [email protected]
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