 Split lot with mortgage? (by Bit Tyrant [IN]) Sep 10, 2013 7:11 PM
 Split lot with mortgage? (by Ken [NY]) Sep 10, 2013 7:35 PM
Split lot with mortgage? (by BillS [CO]) Sep 11, 2013 7:49 AM
Split lot with mortgage? (by WMH [NC]) Sep 11, 2013 9:07 AM
Split lot with mortgage? (by Nicole [PA]) Sep 11, 2013 9:21 AM
Split lot with mortgage? (by Chris [CT]) Sep 11, 2013 5:56 PM
Split lot with mortgage? (by Bit Tyrant [IN]) Sep 12, 2013 12:08 PM
Split lot with mortgage? (by Bit Tyrant [IN]) Posted on: Sep 10, 2013 7:11 PM
Message:
Is it possible to split a lot and sell a piece of land if you have a mortgage?
Like if you find a house with a extra or large yard in a area with city sewer and you can potentially build another house or sell the extra land as a lot.
If so how would you do that? --74.129.xxx.xxx |
Split lot with mortgage? (by Ken [NY]) Posted on: Sep 10, 2013 7:35 PM
Message:
If you are buying the property you would need to only give the bank a mortgage on the house and lot it sits on and have the other piece split out and receive that as free and clear.If you are talking about a piece you already own or buying subject to the existing financing you would need the bank to either agree to remove their lein from that piece that is being split off which they would have no incentive to do unless they were to receive the proceeds from the sale.If you just go ahead and do it the mortgage would still be attached to both pieces --24.92.xx.xxx |
Split lot with mortgage? (by BillS [CO]) Posted on: Sep 11, 2013 7:49 AM
Message:
Someone I worked with had this situation. They had to refi the house and make sure the legal only included the smaller lot. The lot next door was then free and clear.
I think Ken is saying something similar. Buy the house with the smaller lot with the original mortgage and get the deed to the adjacent lot at closing separately. Might work. --75.160.xxx.xxx |
Split lot with mortgage? (by WMH [NC]) Posted on: Sep 11, 2013 9:07 AM
Message:
We had this issue and the bank said IF the house appraised on its own, then we could split out the lot via a refinance. Because the mortgage and thus the deed was originally issued on the whole package, it would require the refinance in order to change it.
We didn't end up following through because we didn't want to sell the second piece anyway. --50.82.xxx.xxx |
Split lot with mortgage? (by Nicole [PA]) Posted on: Sep 11, 2013 9:21 AM
Message:
If the property is one lot on one deed, you definitely will need all sorts of municipal approvals for subdivision.
If the deed consists of several already subdivided lots, depending how the deed is worded, you still may have to go through zoning. The lender may "release" a lot off the mortgage but unless you've got significant equity, they've got no reason to cooperate.
The lender also may ask for a certain amount to be paid in a lump sum if a lot gets sold off.
The municipality and the lender have different agendas and criteria. --72.95.xx.xxx |
Split lot with mortgage? (by Chris [CT]) Posted on: Sep 11, 2013 5:56 PM
Message:
Sure I do it all the time, its pretty simple.
1. You need to get all your city approvals for the lot, this can vary from place to place.
2. You need to contact the mortgage holder. They will most likely want an appraisal.
3. At the closing the mortgage holder will release a part of the property and you close it like anything else.
Here is where it gets tricky:
How much do they owe and how much is it worth? If they owe a ton the mortgage holder is going to want a lot of the note to be paid down to keep the LTV where they need it. That may or may not go over well with the sellers as some of them are financial wrecks and want to blow the money on crap.
OTOH I have done this a couple of times with underwater properties and it brought the LTV down to a reasonable level so the people could get out.
--68.195.xx.xx |
Split lot with mortgage? (by Bit Tyrant [IN]) Posted on: Sep 12, 2013 12:08 PM
Message:
Thanks all. It sounds like the best time to do it is when purchasing a property. --10.5.xx.xx |
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