The Partial Release of Mortgage: When You’re Only Selling Part of Your Property

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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.

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Applying for a Mortgage? Get the Facts on Credit Scores—and How to Improve Yours

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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.

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The Benefits of Refinancing Your Home — Strategically

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Throughout the years of your mortgage, you’ll likely ask the question more than once: Is now the right time to refinance? First, note that refinancing may be no easier than getting that existing loan. Moreover, from 2020 on, expect lenders to have stringent requirements for mortgage approvals.

The answer will depend, too, on varied factors specific to your own situation.

Here are a few reasons refinancing could make a lot of sense — or not.

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I Can’t Pay My Mortgage Any More. What’s Next?

”In these uncertain times…”

Person standing, looking out a window contemplating how they are unable to pay their mortgage.

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.

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Gig Economy: The Impact on Mortgages and Real Estate Ownership

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Many people hope to buy homes, but struggle to qualify for loans. And this means millions of first-time buyers are deferring their dreams of homeownership until they are in a stronger position to qualify for a mortgage loan.

Today’s renters are renting longer—often not by choice. Half of renters now in their mid 50s and older don’t anticipate buying a home any time soon, according to a survey carried out by Freddie Mac, and 15% don’t think they’ll ever be able to afford one. About a third of renters aged 40-54 don’t anticipate buying soon, with 12% predicting they, too, will never have the financial resources to buy. 

Could at least part of the problem be that the mortgage industry has not adjusted to the way millions of renters work?

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Nevada Clarifies Mortgage Law, But What About Deed of Trust Lender Entry Provisions?

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In May 2019, effective October 1, 2019, Nevada passed Senate Bill 382 amending the law pertaining to deeds of trust, foreclosure sales, and homeowners’ associations.

Among other things, this is a change to Nevada Revised Statute § 40.050, whose language states that a mortgage of real property is not deemed a conveyance. If a mortgage does not constitute a conveyance, the mortgage lender may take possession on the home upon the inhabitant’s default, bypassing a judicial foreclosure sale.

Nevada employs a deed of trust between the home buyer and the lender. A deed of trust places the legal ownership of a home with a designated trustee until the buyer—who holds equitable ownership—pays off the loan.   

Of course, some buyers do experience financial challenges and find themselves unable to pay their mortgages.

Here, we briefly explore the ramifications, as seen through a case that shook mortgage lenders’ expectations in homes they held legally through deeds of trust.

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