In this case you are ina short sale situation. You would have to contact the second leinholder and apply for short sale permission to get the home sold. Or pay the difference out of pocket

This is an important question Cindy. Both your mortgages on your home are liens on the property, and will need to be satisfied at settlement. It sounds like you need to work with a good Realtor, and in me, you have found one Please give me a call 215-536-6777 x 329 http://www.bradburyteam.com

Cindy,
The first and second mortgages are both liens on the property and must be removed at settlement. It depends on how much more is needed, but you may want to pay off both loans even if it means selling your home and coming to the table with the money needed. Even if you get a personal loan to pay it off. this should leave you with good credit in tact and will help you when obtaining a mortgage on the other home.
The very best of luck to you!

Michael

Michael D Delp
Mortgage Pro
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Telford Pa. 18969
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Cindy,

Chances are you would need to sell the property and clear all the liens including the second. When you took the second out... the home equity, you used the property as collateral to get the loan. So when you sell the property, that typically HAS to be paid off. That loan has no relevance to whatever property you are thinking about purchasing.

However, there could be a large benefit of purchasing a property in this market at a great value that more than offsets taking a loss of some account for a property that one is selling. I would recommend consulting with a local real estate pro for more info !

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I guess the most important question is if you are going to need a mortgage on your mom's home? Or if the purchase price will be less than what the appraised value of the home would be.

Kinda... you'd have to get a home equity line on the new house to get the cash to bring to the table (i.e. pay off the deficit when you close). It's not a direct switch.. it's borrowing money from Peter to pay Paul, but it can be done.

You will need to call the bank who holds your second mortgage and ask. They may offer you that option as their other choices are a short sale where they will get less than owe or not getting paid at all if you can not sell it and say gave it bak to the bank. Simply call them and ask them for yoru options. good luck with working things out.

GREAT question but no it can't apply, in order to sell the home all liens 1st, 2nd, equity line of credit must be cleared. You might be able to speak with lender on equity line determine if they will do a short sale, however it will effect your credit scores.