Posted on: 08th Dec, 2010 04:17 am
my brother owns some land that he owes a mortgage on and wants to give us some of that land. Does the mortage have to be paid off first?
He has to ask his mortgage lender that question.
There could be enough value to cover the mortgage as far as the lender is concerned and they may allow it or have some procedure to allow it.
For example, if orignal loan was 80% of value, if some land was gifted away, based on today's remaining value of the property, is the existing mortgage balance 80% of remaining value or less. Then the lender may have a procedure to allow it.
Often when property is gifted or sold, the lender would require the owner to pay down the mortgage to a value equal to the percenatge of the original mortgage versus value.
There could be enough value to cover the mortgage as far as the lender is concerned and they may allow it or have some procedure to allow it.
For example, if orignal loan was 80% of value, if some land was gifted away, based on today's remaining value of the property, is the existing mortgage balance 80% of remaining value or less. Then the lender may have a procedure to allow it.
Often when property is gifted or sold, the lender would require the owner to pay down the mortgage to a value equal to the percenatge of the original mortgage versus value.