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Can you sell a home with a mortgage?: Legal steps amid the credit surge - Ambito Financiero
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www.ambito.com
June 06, 2025
Amid the surge in financing for deeds, questions arise about how to complete transactions for homes with outstanding debt. What the law requires, how banks intervene, and what precautions the parties must take to avoid conflicts.
A home mortgaged through a mortgage loan can also be sold, what to keep in mind and how to avoid future problems.Pexels
In April, 22% of deeds in the city of Buenos Aires and the province ( 2,110 deeds secured by a mortgage , representing a 606% increase compared to 2024 ) were executed with a mortgage loan, according to data released by the respective Notaries Associations. This figure marks a recovery trend that, however, coexists with new doubts on the part of those who must sell a property still encumbered with a mortgage.
The growth in financed transactions has reopened a scenario common in other times of credit expansion: homeowners seeking to sell their homes before fully paying off their loans. The legal option exists, but specialists warn of strict conditions, contractual risks, and the need to follow certain key steps.
A possible, but not automatic, operation
Pablo Pirovano , a mortgage law specialist and partner at Pasbba Abogados, clarified that, first and foremost, it's important to distinguish between different legal entities: "Properties are mortgaged, cars are impounded." From there, he indicated that selling a mortgaged property is viable, although it requires careful consideration."The owner must have the mortgagee's consent to cease being a debtor on the loan taken out with that collateral and, at the same time, not breach contractual clauses that often include restrictions on the sale," he explained. He noted that, while it is possible to transfer the property without such authorization and for the buyer to assume the mortgage, the seller remains liable to the mortgagee if the debt is not fully covered by the value of the property.
"The creditor could even claim a breach if there are clauses prohibiting disposal without prior permission," Pirovano warned.
What should be checked before moving forward
From a legal perspective, both the seller and the buyer must ensure that the transaction poses no subsequent risks. "It's important to process ownership reports on the property and the seller's disclaimers. This confirms that there is no foreclosure pending and that the mortgage is current," Pirovano said.Bibiana Varela Guijarro , a lawyer and real estate broker, added that interested parties should contact the lender to agree on how the transaction will be implemented. "Everything must be done simultaneously to avoid breaches of contract or subsequent surprises. Coordination between the bank, the seller, and the buyer is crucial," she noted.
The role of notaries and simultaneous cancellation
When coordinating a purchase and sale with a loan cancellation, notaries perform specific functions. "The lender's notary authorizes the cancellation of the mortgage, and the buyer's notary authorizes the deed of sale. The buyer's money is first used to settle the debt and related expenses, and only then does the seller receive the balance of the price," Pirovano explained.There is also the possibility that the buyer may acquire the property with a new loan. In this case, the notary public of the new mortgage holder will formalize both the sale and the establishment of the new mortgage.
"These operations require greater coordination than conventional transactions because contractual conditions must be met simultaneously," said Varela Guijarro.
Evaluation of the new debtor
When the buyer assumes existing debt or applies for a loan to acquire the property, the lender must analyze their profile. "The bank verifies income, credit history, age, and, in some cases, the family situation. They also consult the Central Bank's debtor database and request risk reports," explained Enrique Abatti Jr. , a lawyer specializing in real estate law and a director of the Chamber of Property Owners of the Argentine Republic.
The offer for purchase and sale remains at a good volume in CABA, and it is possible to acquire a home tied to a bank mortgage.
He clarified that the criteria may vary depending on the financial institution, but the general principle is that the new borrower must demonstrate the same solvency as the original debtor. "Some institutions even require that there be no criminal record or legal situations that could affect the transaction," he explained.
Frequently asked questions and key documentation
Among the common questions, Abatti Jr. mentioned that sellers often ask how to settle the debt and what the total amount they must pay, including interest, fees, and court costs if the loan is in default or foreclosure. Buyers, for their part, ask if they can assume the mortgage and what the financial burden would be.Varela Guijarro emphasized the importance of having all the updated information before moving forward. "It's necessary to confirm the total debt balance and check for any hidden clauses or early termination penalties that could affect the transaction," he noted.
Currently, and in the current economic context, the most popular homes for sale in Buenos Aires, for example, are up to US$150,000 , while in the province of Buenos Aires, they are less than US$100,000.
Contractual aspects to consider
Mortgage deeds often include restrictive conditions. In some cases, they expressly prohibit the sale without the creditor's written authorization. Other times, they require the debt to be settled before the transaction can be completed. "Failure to comply with these clauses can expose the seller to legal action, even if the new buyer agrees to assume the mortgage," Pirovano warned.The first step should always be a thorough review of the original deed. If in doubt, experts recommend consulting a lawyer to verify your rights and obligations before signing any agreement.
An expanding figure
With the return of mortgage loans, the volume of inquiries regarding complex transactions, such as the sale of properties still under mortgage, is also increasing. In April, 22% of deeds in CABA and the province of Buenos Aires were completed with loans, a proportion not seen since the peaks of 2017."It's a dynamic that's resurfacing. Many people need to sell to access new credit, improve their homes, or resolve a financial situation," explained Varela Guijarro. He also noted that, in these cases, it's common for the buyer to use a loan to acquire the property, which requires greater precision in the deed and coordination between notaries.
Market conditions and current regulations allow for this type of transaction. But the success of the process depends on rigorously following legal steps, respecting contractual terms, and validating all the variables involved in advance.
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