combining 2 deeds with two titles and 2 mortgages into ONE

[wooddirk]

I like to know and need some advice how to combine 2 properties together into ONE deed and title with one mortgage.
Both properties are residential and adjacent to each other and financed by Bank of America and have there own mortgage.
On one property is a house and the other is a piece of land fully fenced with water,elec and septic as a trailer home was ther on it before we bought it also it has a garage workshop,chicken coop and 2 sheds on it what is still there.
We took the fence out between the 2 places to make it one property.
We like to re-finance and have it all in one deed,title and one mortgage.
We have been told by our lender that they can not do that.
Any advice or sugestions?

 

[The Warrior Monk]

The legal status of your property needs to be determined. Removing a fence and using the two lots as one parcel doesn't legally make it one parcel.

If the parcels are two legally single-and-separate parcels, many residential lenders will take issue with lending on it in the manner you described, since it will require a blanket mortgage. Most of the residential lending that people are used to dealing with consists of mortgages that get sold on the secondary market; i.e., government-sponsored entities, and your bank won't be able to sell your loan on that market.

Local lenders may be able to on your property in the manner you described. However, the interest rates will likely be higher.

 

[wooddirk]

The legal status of your property needs to be determined. Removing a fence and using the two lots as one parcel doesn't legally make it one parcel.

If the parcels are two legally single-and-separate parcels, many residential lenders will take issue with lending on it in the manner you described, since it will require a blanket mortgage. Most of the residential lending that people are used to dealing with consists of mortgages that get sold on the secondary market; i.e., government-sponsored entities, and your bank won't be able to sell your loan on that market.

Local lenders may be able to on your property in the manner you described. However, the interest rates will likely be higher.

In plane English you are saying it is not possible or is there a way to make those 2 parcels legally ONE ?

 

[Paul Isolda]

Why do you want to combine the properties? Have you thought about the possible impact on the total value of the 2 properties? In many cases, 2 separate properties that can be used independently and sold independently will be worth more than if they were combined into 1. You can utilize the properties however you like since you own them both but taking the step to legally combine them could have a serious negative impact on their value. This would likely be the concern of the lender.

 

[Pilgrum]

This is an issue with your county. The mechanism is called adjoinment and joins the 2 seperate parcels into one with a new parcel number.
If you do not have a mortgage on each parcel I do not know why your lender would have an issue. Or what recourse they could possibly have for that matter. If both parcels are mortgaged than you may have to pay one mortgage off but you SHOULD be able to do what you want by making the adjoinment coincidental with the close of a new loan.
Check with some other lenders.

 

[Pilgrum]

To answer your question about how, understand that this can be done through a process called adjoinement. Talk with your county.
As far as a mortgage I don't see why the lender would have an issue unless they currently hold seperate mortgages on each parcel. A single loan would probably reduce their yield.
And please consider Paul Isolda's comments. This could very well be detrimental to the total value of the parcels as held individually.

 

[wooddirk]

Why do you want to combine the properties? Have you thought about the possible impact on the total value of the 2 properties? In many cases, 2 separate properties that can be used independently and sold independently will be worth more than if they were combined into 1. You can utilize the properties however you like since you own them both but taking the step to legally combine them could have a serious negative impact on their value. This would likely be the concern of the lender.

I hear you and I never thought about that and thank you for giving me this advice.It is not so mutch that I want them into one piece of property other than I like to re-finance and bring 2 mortgages into one mortgage and bring interest rates down.
Would maybe keeping them separate and trying to get a Blanket mortgage a idea to achieve that?
Are there still lenders out there doing this type of mortgage?
I have not enough equity in the home to cash out and buy out the land part totally.The two places together as one still may look good though on the market as it would be a nice horse farm in the country.

 

[The Warrior Monk]

In plane English you are saying it is not possible or is there a way to make those 2 parcels legally ONE ?

You can legally do it, typically by the following:

1. You can legally merge the parcels through whatever process is required in your jurisdiction. From an appraisal standpoint though, we appraise property under its highest and best use. This means that if the property is subdivisible, and most buyers would subdivided the property, we would value it in that fashion. Many secondary market lenders would take issue with this, since they lend on improved properties, not land.
2. You can legally merge the parcels and place a restriction on the property that it cannot be subdivided. In that case you only have one building lot. However, chances are you will diminish the value of the property.

Are there still lenders out there doing this type of mortgage?

I strongly recommend speaking to a local lender regarding this matter.

 

[wooddirk]

To answer your question about how, understand that this can be done through a process called adjoinement. Talk with your county.
As far as a mortgage I don't see why the lender would have an issue unless they currently hold seperate mortgages on each parcel. A single loan would probably reduce their yield.
And please consider Paul Isolda's comments. This could very well be detrimental to the total value of the parcels as held individually.

Yes both properties have there own separate mortgage.
I do not have enough equity in the house part to buy of the other part totally.
I really appreciate all this advice and it helps me a LOT to figure this out.
I have talke arround for a blanket mortgage and called local lenders sofar NO LUCK... You guy's are great..

 

[wooddirk]

You can legally do it, typically by the following:

1. You can legally merge the parcels through whatever process is required in your jurisdiction. From an appraisal standpoint though, we appraise property under its highest and best use. This means that if the property is subdivisible, and most buyers would subdivided the property, we would value it in that fashion. Many secondary market lenders would take issue with this, since they lend on improved properties, not land.
2. You can legally merge the parcels and place a restriction on the property that it cannot be subdivided. In that case you only have one building lot. However, chances are you will diminish the value of the property.

I strongly recommend speaking to a local lender regarding this matter.

As far I know from the county is that none of the properties being on a country road are able to sub divide.Some did but illegal.
All lots should be a minimum of 5 acres and can not be subdived to my knowledge.