Category: Mortgage

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.

A credit score is part of each home buyer’s whole debt and income picture. Lenders consider it a key factor when deciding to approve a loan application. To put the score in context, a lender’s top questions are:

• Whether the borrower can repay the loan, and
• Whether past credit history suggests that the borrower will repay the loan.

The FICO® Score, which is the best known of several credit scoring tools, comes from the Fair Isaac Corp. As we’ll see, mortgage lenders can take other scores into account, too, and even tweak the factors in the scores to come up with unique tests for loan approvals. The good news? While mortgage lenders use their secret sauces to determine creditworthiness, we, the applicants, give them the ingredients.

Here, we take a look at how credit scoring actually works, and how to optimize your score.

”In these uncertain times…”

Difficulties arise in life, sometimes out of the blue. Mortgage obligations that suited us just fine at first can become unmanageable when circumstances swerve out of control. At that point, a homeowner might approach the mortgage lender and ask for a few months of forbearance. Or perhaps it’s possible to work out a repayment plan, or get a loan modification. Sometimes, the homeowner’s financial stress is too serious for any of those options to apply.

Consider that the homeowner must resolve two obligations on the mortgage loan: the lien, and the promissory note, which is the promise of repayment. If an owner cannot keep that promise, the lender is allowed to recover and sell the house.