5 acres, has a current home on it, outstanding 700k, value 430k. Can we sell 1.5 acres of it without having to give the profit to the mortgage company or a bank?
5 acres, has a current home on it, outstanding 700k, value 430k. Can we sell 1.5 acres of it without having to give the profit to the mortgage company or a bank?
No. Recall that the bank owns the property (having the deed) until you complete your payments. You simply don’t have anything legitimate to put in the buyer’s hands asserting ownership.
even if you owned it outright with no mortgage, you would have to try and get the property subdivided first – there may be zoning issues, you may need to have a certain amount of land remaining around the house, the amount of land yuo want to sell may be too small, etc
and even with positive equity, the lender would never allow it
with negative equity – absolutely forget it – that land is not yours to sell – hat would be the same thing as a short sale, which the lender would have to approve the sale (which they wouldn’t) and they would demand ALL the proceeds of that sale, since you already owe them more than they will probably ever get back from you
If the lender agrees, yes. If the lender does not agree, no.
Profit is up to you and the bank to work out. THe note holder will have to do a partial release of the 1.5 ac from the outstanding mortgage before you can transfer clear title.
It’s done all the time. developers borrow hundreds of thousands or even millions to build or buy developments; then the bank releases the individual properties as sold.
Same principal. We do it all the time. Father with mortgage on 40 acres gives son an acre; has enough equity that the bank is willing to release an acre from the collateral and does a partial release.
It is certainly NOT a short sale.