How to Refinance While You Are Trying to Sell Your Home

Attempting to refinance a mortgage while trying to sell the home is usually a strategy for avoiding foreclosure. People who are behind on their mortgage may try to find a buyer for the property while also seeking refinancing to resolve missed payments and bring the mortgage current. Juggling both efforts is stressful, but it is possible in some instances. People whose primary goal is to sell their home have no reason to refinance, because the sale will pay off the mortgage.

Instructions

1

Hire a real estate agent with experience representing sellers facing foreclosure -- if you are facing foreclosure. Provide the agent honest and complete information about your situation, including your interest in refinancing your mortgage even as your home is up for sale. Get referrals for real estate agents from friends and colleagues. Some agents may not agree to represent you because they fear that in the middle of the sales process you may receive bank approval on a refinancing and take the house off the market. That would rob the agent of a possible sales commission.

2

Contact a housing counselor certified by the U.S. Department of Housing and Urban Development. The counselors are experts in foreclosure avoidance and mortgage refinancing. Explain your situation and, if necessary, ask the counselor to contact your lender on your behalf to discuss refinancing. Investigate special loan modification programs available for people seeking to avoid foreclosure if that's your situation. Housing counselors know about all special refinancing programs -- including those backed by government agencies. The counselors also know about standard refinancing programs.

3

Direct your real estate agent to place your home on the market after an appraisal to determine the home's fair market value. Price the home below the market value, if possible, to facilitate a quick sale if that's your goal. Consider other options for selling the house if you owe more on the house than the home is worth. For example, the real estate agent and housing counselor may work together on a proposal for a short sale. Short sales must have the approval of the lender but allow the selling of a property for less than the balance on a mortgage. The lender then either forgives the remaining balance or works out a payoff plan with the seller.