If my family had use their land as collateral for a loan, could they still deed off any of the land to me? If they can, say that they didn't make their payments would that land be taken away from me?
2006-09-19 05:37:12 · 5 answers · asked by newtotheboard2171 2 in Business & Finance ➔ Renting & Real Estate
Don't know if this matters but ust to make sure everyone knows. They already owned the land, just put it up as collateral to have a new home built there.
2006-09-19 05:47:09 · update #1
Maybe. If there is sufficient equity in the remaining property they may allow a portion to be separated from the main. This may be especially true if you also use them for the construction/perm loan as it will benefit the lender to do that deal.
I've sold property and paid enough equity to satisfy a mortgage holder so that they released a portion from the whole without issue. It helps if you have paid payments timely.
Once the lender agrees to allow a piece to be separated have it surveyed and show them what you are doing. There will be an appraisal of the remaining property to determine residual value. If satisfied with the residual values you're good to go. The demised portion will no longer be subject to the original mortgage, meaning if there is a default on the original mortgage, this portion will be exempt. The lender needs to sign off on the survey and provide you a release at closing of the transfer. The title attorney will guide you in this venture.
I've done ump-teen of these, most recent was April 2006.
2006-09-19 06:36:05 · answer #1 · answered by tnbroker1 3 · 0⤊ 0⤋
They can deed off a piece of the land to you, but your land will be subject to their mortgage. If they have paid enough down on their mortgage or th land you are getting is small enough, possibly the bank would consider giving a partial release for the piece you are acquiring. I'd have your family approach the bank and ask. Otherwise, you are going to have land with an outstanding mortgage to someone else. You probably won't be able to borrow money on your land until the prior mortgage is released. And yes, if they stop making payments, you could loose your land. I'd suggest talking to a real estate lawyer and getting some good advise. If your getting this land you may be considering building on it, and I wouldn't do that until you have free and clear title.
2006-09-19 06:58:47 · answer #2 · answered by Kathleen M 4 · 0⤊ 0⤋
Many mortgages have a "due on sale" clause that would require you to get a new loan when the land was transferred to you. If the loan is assumable, then you would become responsible for the payments.
As with any mortgage, if the payments are not made, the lender will eventually foreclose on the property.
2006-09-19 05:50:48 · answer #3 · answered by Bostonian In MO 7 · 1⤊ 0⤋
No. You can not deed property secured by a loan to another person unless the other person wants to take on the liability. If you get the deed, you get the debt too and yes, if they or you default on the loan you would probably lose your land.
2006-09-19 05:40:21 · answer #4 · answered by Starla_C 7 · 0⤊ 0⤋
YES, you need to consult an atty! You can have land deeded to you or be given a life estate in a home and it could be lost to foreclosure! Plus if you are deeded land you could be held liable for taxation! Check it out in ur state!
2006-09-19 05:47:04 · answer #5 · answered by Trisha 2 · 0⤊ 0⤋