How to Get Out of a Mortgage

No one moves into a home expecting they’ll eventually need to get out of their mortgage.

Moving into a home is meant to be a celebration: a sign that your life is moving along on the right trajectory. In most situations, families or individuals settle into their new space feeling accomplished and excited for the future. Therefore, it can be so devastating when unforeseen circumstances force people to consider how to get out of a mortgage.

Circumstances can vary significantly, from the passing of a family member to job transfers and complicated divorce proceedings. But in each case, the reality is the same—getting out of a mortgage isn’t easy. If you are in this predicament, it’s crucial that you understand all the options that are available to you. By thoroughly investigating all potential avenues, you can make the right decision for you, your family, and your future.

To assist you in your decision-making process, we’ve compiled a detailed list of the various solutions that exist for individuals seeking information about how to get out of a home loan. Each of these options comes with advantages and disadvantages, so be sure to consider each one carefully before drawing any conclusions.

Walk Away or Default on Your Loan

If you are unable to pay your mortgage for more than 30 days, typically your loan will go into “default”.

When this occurs, your financial institution will give you a timeline to settle your outstanding balance, and in some cases, they may even work with you by deferring or lowering your payment. When homeowners find themselves in dire financial circumstances, even adjusted payments can be beyond their budgetary means and they may be unable to settle their debts.

On rare occasions, a lender may agree to what is known as “forbearance”, which is simply an agreement to allow the homeowner to not make payments for an extended period of time due to severe, uncontrollable financial hardship.

Finally, a mortgage lender may agree to a deed-in-lieu (DIL) foreclosure. Essentially, this means the lender takes ownership of the property, allowing the owner to move into a more affordable rental unit or the home of a family member. This voids any debt owed and protects the homeowners credit rating.

Unfortunately, if the lender refuses to agree to the solutions listed above, and the homeowner is unable to settle their debt within 120 days, the home will go into foreclosure. Thus, defaulting on a mortgage is the least recommended approach for those wondering how to get out of a house loan.

Short Sale

A short sale is when a homeowner approaches any lienholders or financial institutions they owe in relation to their mortgage and proposes selling the home back to these entities for a price that is lower than the home is worth. This option is best suited for homeowners who do not have enough equity in their home to break even by selling it through a traditional real estate agent or realtor.

The benefit of a short sale is that it allows the property owner to avoid foreclosure and incur less damage to their credit rating (although it will still be impacted). This does not mean that a short sale doesn’t come with its disadvantages.

One major disadvantage associated with the short sale method is that the homeowner has to get all parties involved to agree to a settlement amount. If the owner has taken out several liens against their property from various institutions, this can be extremely difficult. On top of that, short sales often take months to finalize, even when the mortgage lender approves the short sale offer. For individuals who inquired about how to get out of a mortgage loan because they were in a state of financial distress, this can add even more economic strain to an already difficult situation.

For the reasons above, we usually advise homeowners to consider a cash house sale before agreeing to this type of arrangement.


If a mortgage balance remains unpaid for a period of 120 days, the property can go into foreclosure. At this point, the only option remaining for the homeowner is to vacate the property. 

The beginning of the foreclosure process leads to a host of additional issues, including significant damage to the property owner’s credit rating, since a foreclosure remains on a person’s record for up to seven years. Additionally, if the mortgage lender is unable to recoup the outstanding balance by selling the property, they may sue the homeowner for the unsettled amount.

The property owner also does not receive any cash or profit in a foreclosure scenario. They are left with their personal belongings and must do their best to start fresh without making money from the sale of their home. 

The foreclosure option is intensely painful and leaves homeowners even more financially distressed. For these reasons, it is always advised that those inquiring about how to get out of a mortgage contract exhaust all other options before allowing their home to go into foreclosure.

Deed in Lieu (DIL) Foreclosure

As mentioned earlier, a deed in lieu of foreclosure allows the homeowner to forfeit the ownership of their home to their lender(s), absolving their debt and allowing them to minimize the impact to their credit rating.

Another benefit of a DIL foreclosure is that many lenders will provide homeowners with a cash incentive for leaving the property in good shape. Thus, by cleaning and preparing your home for sale, you can earn enough money to pay for a rental unit or make a fresh start in a new location.

It’s important to be cautious when agreeing to a DIL foreclosure, though, as many of these agreements grant the lender permission to sue the homeowner should they be unable to sell the home and make enough profit to settle the outstanding debt. This could leave the homeowner on the hook financially later down to the road.

If you do not want this black cloud following you for months or even years after you vacate your property, it may be best to look at other methods of getting out of a mortgage.

Refinance Your Home

Another option for homeowners who are considering how to get out of a mortgage without ruining credit scores is to refinance the home.

It’s important to note, however, that this option is only available to property owners who have a reliable, stable income and low housing/expense ratio. Otherwise, most financial institutions will be reluctant to refinance the loan. The benefit is that refinancing can prevent foreclosure and greatly reduce the negative impact to a person’s credit score. But it’s important to understand the potential risks of taking out a second mortgage on a home. 

For example, if you still go into foreclosure after obtaining a second mortgage, you can be held responsible for any outstanding balance even if the home is sold. Also, there are fees and other expenses associated with obtaining a second mortgage, including appraisal fees and credit check costs. And finally, you’ll be paying interest on your second mortgage, and these rates are typically considerably higher than those for first-time mortgages.

Rent the Home

Renting is always a great option to consider when determining how to get out of a house mortgage. 

Renting the home allows you to maintain ownership of the property while still making your loan payment is often an ideal solution. However, there are some situations where renting is not possible.

If the homeowner does not have enough money to live elsewhere or does not have family or friends they can stay with, renting out their property may not be possible. Becoming a landlord also requires a significant amount of work, leaving the homeowner responsible for maintenance, upkeep and repairs. And, lastly, in some circumstances, tenants can be difficult to work with, refusing to leave the property when evicted or even causing damage to the home.

These are all important factors to consider when contemplating how to get out of a mortgage.

How Selling to a Cash Buyer is Different

Unlike the options we mentioned above, selling your home to House Buyers of America allows you to enjoy financial freedom and move on to the next chapter of your life almost immediately.

There are three core benefits that "cash for homes" programs, like House Buyers of America, can provide:

  1. Instant Offers

    Unlike the potential homebuyers you would be selling to through traditional real estate agencies, we already have the funds to buy your house fast. We do not require a mortgage loan or assistance from other financial institutions.

    This means we can evaluate your home and provide you with a fair cash offer in just a matter of minutes.

  2. “As-Is” Sale Agreements

    At House Buyers of America, we do not require our clients to clean, renovate, or repair their properties before we purchase them. We buy houses in any condition, even if there is significant damage or the house needs repairs.

  3. Quick Cash

    Many of our clients are astonished when they realize just how fast they will receive cash once they sell their house to House Buyers of America. Once the deal is closed, we aim to get you paid in a matter of days!

    This is a major benefit for homeowners who require funds to settle debts or invest in a new place to live. If you need to sell a house fast, we’re your best option!

Have you been losing sleep at night thinking “I want out of my mortgage”? Our cash for homes program could be the solution you’ve been looking for. Stop stressing about how to get out of a mortgage. Request your cash offer today!