Posted on: 09th Nov, 2008 10:51 pm
My sister in law currently has a home mortgage pulled on 13 acres of land that hasn't been subdivided but intended to be left to 4 siblings. According to her, because the property was never subdivided, the lender would have to include all 13 acres in the mortgage loan in order for them to get the financing. Would the lender be able to release the portion that belongs to the other 3 siblings should the next sibling plan to build and subdivide?
Hi noeuemura!
Welcome to the forums!
I do not think that the lender will release the portion which belongs to the three other siblings. It would have been better if you have sub-divided the property earlier and then let your sibling take a mortgage on his/her portion.
Feel free to ask if you have further queries.
Sussane
Welcome to the forums!
I do not think that the lender will release the portion which belongs to the three other siblings. It would have been better if you have sub-divided the property earlier and then let your sibling take a mortgage on his/her portion.
Feel free to ask if you have further queries.
Sussane
Hi Noeuemura,
As per the mortgage deal, the entire property is considered as the collateral. And until and unless the mortgage loan is paid off, the property cannot be subdivided. So, the lender cannot release the portion that belongs to other siblings.
Thanks.
As per the mortgage deal, the entire property is considered as the collateral. And until and unless the mortgage loan is paid off, the property cannot be subdivided. So, the lender cannot release the portion that belongs to other siblings.
Thanks.
i disagree slightly. it is up to the lender to decide whether to grant a partial release. needless to say, there would need to be an appraisal done on both the full parcel as well as what would remain after it was subdivided.
negotiate with the lender to see what you can accomplish.
negotiate with the lender to see what you can accomplish.
It is up to lender if they will do a partial release. Some do and some do not.
Normally, when a lender does approve the release, they want to keep the existing mortgage balance the same percentage of value as when they did the original loan. If new value of remaining land and house went up, maybe would not have to pay anything. If remaining land and house value less, might have to "pay down" the existing balance to keep the lender happy with the same "loan to value" as the original mortgage and property.
Normally, when a lender does approve the release, they want to keep the existing mortgage balance the same percentage of value as when they did the original loan. If new value of remaining land and house went up, maybe would not have to pay anything. If remaining land and house value less, might have to "pay down" the existing balance to keep the lender happy with the same "loan to value" as the original mortgage and property.
