Getting a partial release of mortgage will allow you to take ownership of a portion of the collateral that was used to secure a mortgage. Not every mortgage lender is going to allow this process, but if they do, it may be to your benefit. Here are a few things to consider about a partial release of mortgage and how to apply for one.
Partial Release of Mortgage
As you pay your mortgage over the course of several years, you should develop some equity in your property. Until you pay off the mortgage, you are not necessarily going to have access to this equity. One way that you can get your hands on the portion of the property that you have already paid off is to request a partial release of mortgage. When you do this, the bank is essentially going to be giving you the portion of your property that you have already paid for. For example, let's say that you had a mortgage that included 10 acres of land. Once you paid off half of the mortgage, you decided to ask for a partial release of mortgage for half of the property. The bank could potentially give you 5 acres of the land and take it out from under the mortgage loan.
Applying for a Partial Release of Mortgage
The process of applying for a partial release of mortgage is going to be different with each individual lender. However, in most cases, you are going to have to fill out a form and provide the lender with the proper documentation. The lender is going to evaluate your application and determine if they want to give you back part of your property.
Before you can apply, you need to gather the appropriate information for this process. One thing that you are going to need is a complete record of all of the mortgage payments that you have made up until this point. You are also going to have to legally identify the piece of land that you want to be released. You need to have a survey done and you need to have an official appraisal done on the property. You are going to need to know the accurate market value of the property in order to convince the lender that they should release a portion of the land to you.
In addition to finding out information about the property, you are also going to have to have the signatures from all of the individuals that are on the deed to the property. If you own the property jointly, you cannot engage in this process unless all of the joint owners are on board.
Once you apply for a partial release of mortgage, you are going to have to pay the lender a certain amount of money for an application fee. This fee will vary from one lender to the next, but they will not process your application until you have paid it.