QUESTION
Is it possible to split off a portion of your acreage if you still owe money to the bank on a line of credit?
Asked on Apr 16th, 2013 on Residential Real Estate - Virginia
More details to this question:
Live in Virginia, have a 2500 sf 2 story colonial on 4.5 acres. My husband runs a business and used our home as collateral on an equity line. We owe $93K on this, otherwise the house had been paid off for 10 years. We would like to take approximately 1 acre and a detached garage (to renovate into a smaller home for us or for rental) and divide it seperatly from the main house and 3.5 acres. The main house and remaining 3.5 acres is valued at well above the $93K owed.
1 ANSWER
You can split off the acreage, if the county/town/city allows it under its zoning rules, but the bank will have a lien unless they sign a partial release for the lot you carve off. Talk to the bank and if you can split it off under the zoning laws, and if the 3.5 acres and house appraises well, you should be able to get a partial release, called a "Certificate of Partial Satisfaction" for the1acre portion, to be recorded in the clerk's office. You will probably need a separate septic system unless you are on a central sewer system. Good luck.
Answered on Apr 17th, 2013 at 3:24 PM