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If we sold land from the new property first, would it make sense for us to finance that property with a first and second mortgage so that we could pay off the second mortgage when the lot sold?

My gut tells me that would not be possible. I'm pretty sure the first lender would also want at least a partial payoff if part of their collateral is sold.

I am wondering if you might need to do a refinance after you subdivide the land, getting separate loans for each parcel. I'm almost certain that conventional home lending is generally on one legal parcel per loan. I've never heard of a single loan being secured by two or more legal parcels. (At least not in the residential lending arena. Multiple parcels are not at all unusual for commercial loans.)

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