WHAT ARE MY LEGAL RIGHTS TO THE EQUITY IN MY HOME IF THERE IS A CONTRACT FOR DEED ON IT?

Get Legal Help Today

 Secured with SHA-256 Encryption

WHAT ARE MY LEGAL RIGHTS TO THE EQUITY IN MY HOME IF THERE IS A CONTRACT FOR DEED ON IT?

DO I HAVE THE LEGAL RIGHT TO BORROW AGAINST THE EQUITY? MY HOUSE IS VALUED AT $40,000 AND THERE IS A $15,000 CONTRACT FOR DEED ON IT.

Asked on April 30, 2011 under Real Estate Law, Missouri

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If you're in a contract for a deed, you cannot due anything which would encumber the title further; so, for example, you cannot take out a new mortgage, a new home equity loan, or a new home equity line. Doing so would create new security interests and affect your ability to conveny title.

On the other hand, if there is already an existing line of credit, then you may draw against it. That's because drawing on the line does not create a new security interest--one already exists--but rather will only affect how much money you will be able to make on the sale (since you'll have to pay off the loan). The only caveat is that if you borrow so much that you won't be able to pay the loan(s) off, since that would then affect the ability to transfer title, you may be in breach of contract.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption