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What If I Still Owe Money on My Mortgage?
(Santa Barbara Real Estate: Seller Guide)
If you still have a mortgage, you’re not alone—most Santa Barbara sellers do. The process is straightforward, and your lender is paid directly through escrow when the sale closes.
How Mortgage Payoff Works During a Sale
1. Escrow contacts your lender to request an official payoff amount.
2. The payoff is deducted from your sale proceeds automatically.
3. Your lien is released, allowing the transfer of ownership.
4. You receive your net proceeds after all closing costs, commissions, and credits.
What If You Have a HELOC or Second Loan?
All loans secured by the property must be paid at closing. Escrow handles each payoff.
What If You Owe More Than Your Home Is Worth?
If you're “underwater,” there are still options:
● Paying the remaining balance
● Pricing strategically to reduce deficit
● Considering a short sale (requires lender approval)
Why You Should Know Your Net Early
We prepare a custom seller net sheet so you can plan with confidence.
Start with your free Santa Barbara home valuation: 👉 https://www.ethertonrealestate.com/home_value Learn more about Justin and our values-driven service: 👉 https://www.ethertonrealestate.com/agent-profile/justin-etherton-13844616
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