What Happens If You Owe More Than Your House Is Worth in Marrero, Louisiana?
Owning a home is supposed to be a good investment, but sometimes things don’t work out the way we planned. You might owe more on your mortgage than your house is currently worth, and if you’re thinking about selling, that can create a difficult situation.
As a local company that buys houses throughout Greater New Orleans, including Marrero and the West Bank, we’ve seen homeowners deal with all kinds of financial and property challenges.
One question that comes up is: Can I sell my house if I owe more than it’s worth?
The short answer is yes, it’s possible, but how you sell and what happens to the remaining mortgage balance are important.
Let’s go through what you should know.
What Does It Mean to Be Underwater on Your Mortgage?
When you owe more on your mortgage than your house is worth, it’s called being underwater or having negative equity.
For example, let’s say you own a house in Marrero.
· Your remaining mortgage balance is $190,000.
· Your house is currently worth around $165,000.
· You owe approximately $25,000 more than the property’s value.
If you sell the house for $165,000, that won’t be enough to pay off the entire mortgage, even before closing costs and other expenses.
This doesn’t necessarily mean you’re facing foreclosure or that you need to sell immediately. If you’re making your payments and plan to stay in the house, you may have time to consider your options.
But if you need to move, can’t afford the payments, or have a property that needs major repairs, things can get more complicated.
Why Would a House in Marrero Be Worth Less Than the Mortgage?
There are several reasons this can happen.
Property condition: A house with foundation problems, roof damage, outdated electrical systems, or other major repairs may be worth less than expected.
Changes in the housing market: Home values don’t always increase. Local market conditions can affect what buyers are willing to pay. The last few years have been challenging here in the New Orleans market
A small down payment: If you purchased the property with very little money down, you may not have built much equity yet.
Additional borrowing: Refinancing or taking out a home equity loan can increase the total amount owed against the property.
In Marrero and other Westbank communities, repair costs can also make selling difficult, especially when a house has been neglected for years.
Can You Sell a House With Negative Equity in Marrero?
Yes, but you generally need to resolve the mortgage balance before the lender will release its lien. Or if you are willing to get creative that opens additional avenues for you.
Here are a few options worth considering.
1. Pay the Difference at Closing
If you have enough savings, you may be able to sell the property and bring money to closing to cover the remaining mortgage balance and selling expenses.
For example, if you owe $190,000 and your net sale proceeds are $160,000, you may need approximately $30,000 to complete the transaction.
This can work for some homeowners, but not everyone has that kind of money available.
2. Ask Your Lender About a Short Sale
A short sale happens when your mortgage lender agrees to let you sell the house for less than the amount owed.
The lender must approve the arrangement, and the process can take longer than a regular sale.
You should also find out whether the lender will forgive the unpaid balance or whether you could still be responsible for some of it.
A short sale may affect your credit and could have tax consequences, depending on your situation.
3. Keep the House for Now
If you can comfortably afford your mortgage payments, holding onto the property may be an option.
You could continue living there while paying down the loan, or explore renting it out if that makes financial sense.
Of course, being a landlord comes with responsibilities, including maintenance, insurance, taxes, and dealing with tenants.
4. Talk to a Local Cash Home Buyer
Selling directly to a cash home buyer may be worth exploring if your house needs significant repairs or you want to avoid the traditional listing process.
At NOLA Buys Houses, we buy houses in Marrero and throughout Greater New Orleans in their current condition.
You don’t have to make repairs, clean everything out, or prepare the property for showings.
However, if your mortgage balance is higher than the purchase price, the difference still needs to be addressed. That may involve bringing money to closing or getting approval from your lender for a short sale.
A cash offer can simplify parts of the selling process, but it doesn’t automatically erase mortgage debt.
An experienced investor should also be able to present some creative financing options to you. These can solve negative equity problems and allow you to sell the house without you needing to come to the table with a large chunk of money.
What If You’re Behind on Mortgage Payments?
Being underwater and being behind on payments are two different things, although they can happen together.
If you’ve missed payments, your lender may add late fees and other charges. Continued missed payments can eventually lead to foreclosure proceedings.
If you’re in this situation, contact your mortgage servicer as soon as possible.
You may qualify for a repayment plan, loan modification, forbearance, or another loss-mitigation option.
A HUD-approved housing counselor can also help you understand your choices.
The earlier you address the problem, the more options you may have.
Should You Spend Money Fixing the House Before Selling?
Not necessarily.
Let’s say your Marrero house needs a new roof, foundation repairs, and plumbing work. You might spend thousands of dollars trying to improve the property, but that doesn’t guarantee you’ll recover the full amount when you sell.
Before making major repairs, compare the likely selling price in its current condition with the potential price after renovations.
Sometimes selling as-is makes more financial sense, particularly when the owner is already struggling with mortgage payments.
We Buy Houses As-Is in Marrero, Louisiana
Every homeowner’s situation is different. Some people can afford to wait, while others need to sell because of relocation, financial problems, inherited property, or costly repairs.
At NOLA Buys Houses, we buy houses throughout Marrero, Jefferson Parish, and the Greater New Orleans area.
We make no-obligation cash offers, purchase houses as-is, cover our standard purchase closing costs, and work with sellers on a closing date that fits their situation.
If you owe more than your house is worth, we’ll be upfront about what our offer means and whether the mortgage balance creates an obstacle to closing. We can also present some creative financing options for you to consider as well.
Thinking about selling your house in Marrero?
Call or text us at 504-264-1407, or visit www.nolabuyshouses.com to tell us about your property.
We’ll take a look at your situation and help you understand whether a direct cash sale is an option worth considering.