What Happens to Old Home Loans When Selling a House

If you’re planning to sell your home in Nevada, you might be asking, “What happens to old home loans when selling a house in Nevada?” This is a common question for homeowners in Reno, Sparks, Carson City, Dayton, Fernley, Fallon, Minden, Genoa, Gardnerville, Moundhouse, Sun Valley, Silver Springs, Stagecoach, Silver City, Virginia City, or Verdi. Most people still have a mortgage when they decide to sell, and understanding how it’s handled is key to a smooth sale. With the help of an experienced real estate agent like Cassie Craig at Craig Team Realty, you can navigate this process with confidence. In this guide, we’ll break down what happens to your mortgage when you sell your home in Nevada, using accurate, up-to-date information for 2025.

How Does a Mortgage Work When Selling a Home?

When you sell a house in Nevada, any existing home loan, such as a mortgage or home equity loan, must be resolved before the property’s ownership can transfer to the buyer. In places like Reno or Sparks, where the median home sale price in June 2025 was $580,124 and $510,000 respectively (per Rocket and Redfin data), most sellers don’t have their mortgage fully paid off. That’s okay! The sale process is designed to handle this, ensuring your lender is paid and you can move forward. Let’s explore the key steps and considerations.

What Is a Mortgage Payoff?

A mortgage payoff is the process of settling the remaining balance on your home loan during the sale. In Nevada, the sale proceeds are used to pay off the mortgage at closing. Your lender provides a payoff statement, which lists the remaining principal, accrued interest up to the closing date, and any fees. For example, if you’re selling a home in Carson City, where the median sale price was $560,000 in July 2025 (per Nevada Appeal), your real estate agent at Craig Team Realty will work with your lender to get this statement early, ensuring no surprises.

Steps to Handle Your Mortgage When Selling

Selling a home with a mortgage in Nevada follows a clear process. Here’s how it works in cities like Dayton, Fernley, or Fallon:

  1. Request a Payoff Statement: Contact your lender to get a payoff statement. This document details the exact amount needed to clear your mortgage, including principal, interest, and any prepayment penalties. In Minden or Genoa, your Realtor can help you request this early.
  2. Assess Your Home’s Value: Work with a trusted real estate agent to determine your home’s market value. In Reno, the median sale price was $580,124 in June 2025, while in Carson City, it was $560,000 in July 2025. Knowing your home’s value ensures the sale price covers the mortgage and other costs.
  3. List Your Home: A skilled Realtor will market your home to attract buyers in Gardnerville, Sun Valley, or Silver Springs. They’ll highlight features like a modern kitchen in Verdi or a large lot in Stagecoach to maximize appeal.
  4. Review Offers: Your real estate agent will help you evaluate offers to ensure they cover the mortgage payoff and closing costs. In Nevada, sellers typically pay 1.5%–3.1% of the sale price in closing costs, plus transfer taxes of $1.95 per $500 of value (per Bankrate and RealEstateWitch).
  5. Close the Sale: At closing, the escrow agent or title company uses the sale proceeds to pay off the mortgage. Any remaining funds go to you. For sales in Moundhouse or Silver City, Craig Team Realty ensures this process is seamless.

Handling Multiple Loans

If you have additional loans, like a Home Equity Line of Credit (HELOC) or second mortgage, these must also be paid off at closing. For example, if you used a HELOC to upgrade your home in Virginia City or Fallon, it’s considered a lien on the property. The sale proceeds will settle all liens, and your real estate agent at Craig Team Realty will coordinate with all lenders to ensure accuracy.

What If You Owe More Than Your Home’s Value?

In rare cases, you might owe more on your mortgage than your home’s current market value, known as being “underwater.” This can happen due to market declines or high loan balances. If you’re selling in Fernley or Sparks, here are your options:

  • Short Sale: With lender approval, you can sell the home for less than the mortgage balance. This requires negotiation and can take time. A Realtor experienced in short sales, like those at Craig Team Realty, can assist in Fernley or Gardnerville.
  • Pay the Difference: If your home in Dayton sells for $450,000 but you owe $470,000, you may need to bring $20,000 to closing to cover the gap.
  • Deed in Lieu of Foreclosure: As a last resort, you can return the deed to the lender, though this affects your credit. Consult a financial professional for guidance, as this is outside a real estate agent’s expertise.

For complex financial situations, always consult a qualified financial advisor to explore the best path forward.

Closing Costs When Selling a Home in Nevada

Besides paying off your mortgage, you’ll need to cover closing costs when selling a home in Nevada. These vary by location but typically include:

  • Real Property Transfer Tax: Nevada charges $1.95 per $500 of the home’s value, or about $1,800 for a $461,800 home (the state’s median sale price in June 2025, per Redfin). Washoe and Churchill counties may add small additional fees.
  • Realtor Fees: Sellers typically pay around 2.5% for their listing agent’s services. Every agent is different. How much a buyer's agent receives, if any, is negotiable.
  • Title and Escrow Fees: These cover title searches and insurance to ensure a clear title. In Nevada, buyers often pay for the lender’s title policy, but sellers may share some costs, averaging $1,000–$2,000 (per Houzeo).
  • Recording Fees: Sellers pay about $43 per document to record the transaction, though this can vary by county (per Houzeo).

For a $580,124 home in Reno, expect closing costs of about $8,700–$18,000 (1.5%–3.1%), plus Realtor fees. Your real estate agent at Craig Team Realty will provide a detailed estimate for sales in Minden or Verdi.

Inherited Properties and Mortgages

If you’re selling an inherited home in Genoa or Silver City, the mortgage process may differ. Under the federal Garn-St Germain Act, surviving relatives can continue mortgage payments without assuming the loan, provided payments are maintained. However, if you sell, the mortgage must be paid off at closing. Consult a probate attorney for inherited properties, as this is beyond a real estate agent’s scope.

The Value of a Trusted Realtor

Selling a home with a mortgage in Nevada requires careful coordination. A qualified Realtor, like Cassie Craig at Craig Team Realty, offers invaluable support by:

  • Obtaining and reviewing your payoff statement.
  • Pricing your home competitively based on 2025 market trends in Reno, Sparks, or Fallon.
  • Negotiating offers to cover your mortgage and costs.
  • Ensuring compliance with Nevada laws, such as the Seller’s Real Property Disclosure Form (NRS 645.252).

With Craig Team Realty, you’ll have a partner to guide you through every step, whether you’re in Sun Valley, Stagecoach, or Silver Springs.

Start Selling Your Nevada Home Today

Handling an old home loan when selling a house in Nevada is manageable with the right support. From paying off your mortgage to covering closing costs, Craig Team Realty at eXp can ensure a smooth process in Reno, Sparks, Carson City, Dayton, Fernley, Fallon, Minden, Genoa, Gardnerville, Moundhouse, Sun Valley, Silver Springs, Stagecoach, Silver City, Virginia City, or Verdi. Contact Cassie Craig and the team at (775) 306-7591 to begin your home-selling journey. Visit www.craigteamrealty.com for expert real estate guidance and personalized service!