Real state Experts, I need some info please.

SuaveX5 · #1 10-25-2006, 08:11 PM

We have a house in which the back yard ends on the next block; a few people have stopped by to ask if we wanted to sell part of the yard so they could build a house facing the other street.

Does anyone have any idea how the bank that holds my mortgage would go about this if I want to divide the property and build another house on the there half of the property?

Will I have to sub-divide the property and they will readjust the new value of the house and give me a new mortgage base on the new value

Any info?

Thanks in advanced.

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loansinpa · #2 10-25-2006, 08:51 PM

Sub-divide - yes, without much doubt. You would need to establish what parcel you're selling, new legal description etc.

Mortgage perspective - They will probably have you provide an appraisal based on your home and the land that is staying with it. This will be to see if the loan still stays within the LTV (loan to value) ratios of the loan program you're in.

Example...300k prop value now. Your loan was 240k (80% ltv). You pull off the piece of land and the property is now worth 250k and you owe 240k (96% ltv). This will send a lender into a tissy fit. This is drastic to prove a point. They may have you pay down the loan enough that it still meets the original loan guidelines.

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