Investor · Apex, NC · Member since 2014 · 340 posts · 188 votes
If someone has a mortgage on their property with a house and I want to buy a sliver of their side yard (~8 feet all the way back totaling 8% of their whole lot).what is the process to deal with the bank? I’m guessing there is some sort of approval process? Who here has done it or knows exactly how it’s accomplished?
This is a fun question. The bank is going to have to agree to any sale of the property that they are using as security for a loan. There are a couple of ways that you might be able to work around this.
You will need to tag a local real estate lawyer in early in this process.
1 consider having the seller refi. This will pay off the current mortgage, and the new bank can hold a mortgage on the smaller property, assuming that he can find a bank to lend him money
2 consider taking and recording an option on the land. This will secure rights to the land for you. It will also give you the ability to close on the land once the original mortgage is satisfied.