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Can you sell off some of your property if you still owe on your mortgage?

  • September 28 2012 - US
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Answers (6)

Profile picture for user92799310
I own 24 acres have a chance to sell of 20 of it, I still have a mortgage on the house but not the ground, will I receive the money or the mortgage company?
  • August 17 2013
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Not unless this part of the property is not part of the colleteral for your lender.If it is part of the property mortgaged you would have to ask the lender for an adjustment. Means the lender would have to let go of part of the security against the loan. My educated guess: no happening..
  • September 28 2012
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Profile picture for Ofe Polack
Most of the sales have a balance on the mortgage.  At closing the title company makes sure that what you owe is paid and then the title changes hands.  If you owe more than you can get on the sale of the property, that is called a short sale.  There has to be a hardship in order for the lender to allow a short sale.  Hope this answers your question.  
  • September 28 2012
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I believe what you are asking is "can you sell a percentage of your property and form a TIC while holding a mortgage". Nearly every note states a due in full clause upon transfer of ownership which means any portion of the home being transferred to another party. If you chose to sell a portion of the home to someone, the bank would be notified by their servicer and call your note due in full as you would be in default at that time.

Check your note to be sure that clause is in effect but I am fairly certain you will see it in there as that as it is a common protection clause. The best way around it is to refinance with the new party on the note and record it as TIC (tenants in common). Cheers!
Kevin R. Kieffer, Broker Associate, Northern California - Walnut [Phone removed by Zillow moderator]
  • September 28 2012
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Profile picture for sunnyview
Maybe, but the bank has to agree to the partial sale. I had a friend who had a house with an extra lot. The neighbor wanted to buy the lot and build a garage on it. She was able to have a survey done, pay a little more toward her mortgage principal so that she had a more equity in her property.

She had to pay for an appraisal without the lot to be sold and after it was done she paid to have the mortgage rescheduled with the new mortgage amount.

Is was a lot of paperwork to go through, but her mortgage company allowed her to do it since their equity position was still protected.
  • September 28 2012
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Thanks for posting your question on Zillow.com!

People more often than not sell property with a mortgage on it.  If you owe more than it is worth then this is a "short sale".

  • September 28 2012
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