Selling a portion of property

[spunkydog]

What is the name of your state (only U.S. law)? NC
I have a home and a garage apartment (separate buildings) and want to know if I sell the garage apartment building does the money have to go to pay on the mortgage? I do not have a large mortgage on the property but I need the money to pay debts I incurred when I had a business, which I had to close due to the economy. Thank you to anyone who can give me some advice.

[justalayman]

are both buildings under the same mortgage?

If so, you cannot sell part of the collateral under the mortgage without the mortgage holders permission. Not knowing what is owed and what the resulting property is worth, it is possible they could release part of the collateral without requiring the mortgage loan to be paid down but, if the loan is not adequately collateralized by the remaining property, they may require a pay down of the loan or simply not approve of the split.

So, if under a common mortgage, you simply need to address this with the mortgage lender.

[nextwife]

And expect that the lender may wish an appraisal to determine the value impact of the change in collateral. Also, you will need to know that the CC&Rs and local building ordinances allow the planned division. Included in such consideration: access, location of required utilities, locations of any easements or right of ways, and how any required set backs would be affected.

[spunkydog]

Thank you both for taking the time to reply to my question. You gave me a lot to think about. And, yes, both buildings are on the same mortgage.

[HomeGuru]

Originally Posted by spunkydog

Thank you both for taking the time to reply to my question. You gave me a lot to think about. And, yes, both buildings are on the same mortgage.

**A: since both properties are covered by the blanket mortgage, the lender will not release without the mortgage being current and the excess funds may be required to pay down the principal of the house.

[xylene]

And you can expect this division of property to cost a lot of money to set up the separate parcels - if that is even allowable.