Real property question

[Rogue Ram]

I'm getting conflicting answers to this one. Lets say you own 20 acres of property, zoned for one house per 10 acres. It is recorded as one lot of 20 acres, not two 10 acres plots. You have a mortgage on it. You wish to build on the other 10, so you have to partition the other 10 off, sell the house and 10 to finance it. The house and 10 acres would easily bring enough to pay off the mortgage.



Just how does this work with the mortgage company? Do they do this or do you have to own all of it outright? Anyone been through this????



Thanks in advance,



RR

 

[bighammer]

For a construction loan, the property has to be paid off. You can use the construction loan funds to pay off the balance owed on the land at closing. Upon completion of the house, you can split the property and sell the one side and keep the other.



Ask your bank.

 

[CChase]

Start talking to your county officials first. Dividing property is not always as easy as having a surveyor draw a line and recording a document... there are processes and bureatic BS you have to wade through before you proceed.

 

[E7mack96]

my experience is that you ask the mortgage co to release the lein on 10 acres, as you plan on selling/developing it. They will usually charge a fee to do this, and they may ask for several thousand $ to lower the principal balance to a # of their liking.



My parents owned 400+ acres and have sold off 5 at a time like this.



(this does not preclude the zoning/survey issues that may come up)

Best to have it surveyed, and ok'd with planning/zoning first, then talk to lender/mortgage holder

 

[Rogue Ram]

Thanks guys... ... ..... the property is in fact zoned buildable, already talked to the county about it. It does appear it comes down to the bank and how they want to do this. I was looking at this piece of property, but now its gone! Vanished between the time I originally posted this and this response. Wow... ... . things are moving round these parts if acreage is involved.



Thanks again



Rogue