Category: Mortgage

What’s the plan when your spouse or co-borrower needs to come off the mortgage? Will you refinance, keep a modified version of the loan, or sell the home to pay the loan off?

Here’s a quick Q&A to explore the possibilities.

It’s now obvious: the mortgage lending industry is forever changed. Here’s what happened — and what’s likely to come next.

The Year of Minimum-Risk Lending

Back in April 2020, we noted that mortgage lenders were getting tougher on loan applicants. Perversely, the borrowers who stood to benefit most from the low interest rates that led to a refinancing boom were the ones who faced the highest barriers to access. Lenders scrutinized any changes in applicants’ work lives, income and credit profiles, looking for signs of instability.

Banks are traditionally uncomfortable with non-salaried applicants and volatile income streams. Without a continual stream of W2 wage income, applicants are often considered too risky. Some mortgage companies simply stopped working with applicants outside the Qualified Mortgage (QM) category in 2020. Even the companies that had, pre-pandemic, used their professional discretion to help viable borrowers. Even the ones that specialized in out-of-the-box loans.

What if a potential buyer is interested in acquiring a part of your property, and you’re willing to sell?

If you’re a land owner with full rights in a piece of property, you may legally sell any part of it — unless bound by an agreement to the contrary. If a parcel is mortgaged, an owner may not subdivide parts to sell, thereby shrinking the loan collateral, without the lender’s approval. A homeowner who attempts to sell mortgaged property without the lender’s permission invites the risk of triggering the loan’s “due on sale” clause and having to pay off the full mortgage.

Thus, to transfer title to a part of a property, the owner must first receive a partial release of mortgage. This instrument allows the sale of a section of a property, free and clear, yet keeps the mortgage on the remainder.

How does the partial release process play out? In this article, we boil it down to a few key elements. We also offer some contextual questions to consider. By examining the context of a potential sale, a potential seller can avoid serious losses in value.

The Pros and Cons of Consolidating Your Home Loans

Can money be lent for multiple houses through one mortgage? It can. A number of scenarios could count as multiple properties and one mortgage. Here, we look at a few examples.

The Key Financial Roles and How They’re Played

Especially for first-time buyers, getting to know who’s who in the loan process can be complicated — even surprising! First you meet the mortgage broker. Soon, other actors emerge. As your broker interacts with them, the drama unfolds.