I am thinking about having a home quick deeded to me that is in default for about 4 mos now. I wanted to know if it the loan would be under the current owners credit? How would I be at risk? I know that I would have to get thier loan current. Is there anything else that I would need to do?
2007-01-09 08:32:30 · 8 answers · asked by Tanya 1 in Business & Finance ➔ Renting & Real Estate
You will have to bring the loan current. Don't worry about the current lender - if they are getting paid they aren't going to call the loan due. But there are risks:
There could be other loans you do not know about, there could be mechanic's leins. Get a title company to insure the transfer for you. Also get a good feel for the REAL value (not appraised value) of the property before you commit.
Good luck.
2007-01-09 08:42:07 · answer #1 · answered by sdmike 5 · 1⤊ 0⤋
The proper terminology for what you are about to do is called taking a property subject to the existing loan. The other thing called a deed is normally called a quit claim deed.
Make sure you employ the use of a title company for this transaction. You will be able to find one in your local telephone book. They will handle all the legal requirements. Insure that you tell them you are taking the property subject to the existing mortgage. Also change the hazard insurance policy or purchase another.
You will need to bring the loan current to include any and all fees owed to the lender at or before the close of this transaction.
Yes the loan will still be under the seller's name until you refinance the house or sell it to someone else who refinance it.
If there is a due on sale clause and the lender find out the property has been transferred they could call the loan all due and payable. If it is not paid at that time the lender can then foreclose on the property. I have yet to see this happen as long as the mortgage notes are paid as agreed monthly.
This method of investors buying property is done daily. It keeps the investor from coming up with large sums of money while the property is being re-habbed for sale or rental.
I hope this has been of some use to you, good luck.
"FIGHT ON"
2007-01-09 17:18:32 · answer #2 · answered by Skip 6 · 0⤊ 0⤋
The quit claim deed once recorded triggers the due on sale in the deed of trust. They can quit claim it to you but since they have received a notice of default already then there are atty fees and back interest due as well as any prepayment penalties on the loan. You must bring it current first and that can be done right up to the point of sale at the courthouse. At That point I would seek my own financing on this home if you plan to live there or even if you plan to rent it. Your scores may afford you a much better interest rate than the current owners. Just paying the mortgage on time is one way to keep this property for 1 year. The lender may not care who is paying just so long as it gets paid. I do recommend you get it out of the current owners name as soon as possible since if they have not paid the bank then they are not paying any one else so judgments etc could get attached and you not know it. Get a title company to search it for you.
I am a mortgage banker in Tennessee
2007-01-09 17:00:52 · answer #3 · answered by golferwhoworks 7 · 1⤊ 1⤋
Wow. You're really far off here.
First, it's a quit claim deed.
The problem is, when a mortgage is recorded, its done by and between the lender and the person who owns it now. You cannot just have a property deeded to you and 'inherit' the loan and make payments on it. Rarely, a mortgage may be "assumable", but that's not done often anymore. You have to purchase the property and go through an escrow company and get your own financing. The escrow company handles the closing and pays off the previous mortgage and funds the sale with the new mortgage that you are getting.
2007-01-09 16:56:37 · answer #4 · answered by Anonymous · 1⤊ 0⤋
First off, it's a quit claim deed. Second, you will have to qualify for the loan in order to be able to take over payments, if the transfer is even allowed. When a bank has been defaulted on already, they usually want to dump that loan and start over. Also, none of the previous owners' bad credit will come over to you, if you are even able to do the above.
You might be better off just applying for a new loan and purchasing the property.
Good luck!
2007-01-09 16:58:56 · answer #5 · answered by trblmkr30 4 · 1⤊ 1⤋
The old loan will never report to your credit regardless of your name being on the title. If you make payments on the loan directly to the lender for 1 year you can more easily refinance the loan in your own name as well. You might want to hurry though as the foreclosure process is surely about to begin after 4 mos. of non- payment.
2007-01-09 16:40:34 · answer #6 · answered by flamingojohn 4 · 0⤊ 0⤋
First learn what the hell you're talking about. It is QUIT CLAIM. If their loan is transferable then the bank MIGHT let you take it over.
2007-01-09 16:39:11 · answer #7 · answered by Anonymous · 1⤊ 3⤋
save yourself from fraud and get an agent
2007-01-09 16:41:03 · answer #8 · answered by Anonymous · 1⤊ 2⤋