Board Topic: selling house paying heloc
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selling house paying heloc

Posted by: ed Oct 14 2004, 12:01 AM
If selling a house which also has a heloc, is it possible to pay the mortgage and the heloc yet somehow keeping the line of credit after it has been paid. I know the answer is probably no since the bank will lose it's collateral but I was just wondering if there was another way since I have other properties.

Posted by: loanuniverse Oct 14 2004, 03:27 PM
Ed:

The answer is no.

You are right about the reason, the lender will lose collateral. Therefore, the loan becomes unsecured.

I actually called a friend that helps manage a consumer lending department and he reminded me of one thing. Every time that there is a real estate transaction, the attorney for the buyer or the attorney for the buyer’s lender will run a “title search”. This title search will show the liens for the first mortgage as well as the lien for the second mortgage {the HELOC}. If the buyer wants a clean title, both of those lenders will need to sign releases.

No lender in his right mind would sign a release without getting paid in full and closing the facility.

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