Month: April 2017

Many states have different laws regarding property ownership rights, including the nine states that are considered “community property” states.

If you have issues relating to property ownership, it can be confusing. Discuss your concerns with your real estate attorney.

There can be a number of possible reasons why a home purchaser may want to waive ownership rights to a property.

If, for example, one of the buyers is in some type of legal or financial situation that may impact ownership of the property, waiving his or her rights may be a solution.

To remove someone’s ownership rights, an attorney can file what is called a “quitclaim deed.”

This is a legal document that permits a person to waive all ownership interests in a property.

At some point in the future, when legal or other financial issues are no longer a concern, the original title holder can re-add the individual who had waived his or her ownership rights by having another quitclaim deed filed.

One interesting fact: an individual with poor credit, to the point of being unable to qualify for a mortgage, can still be on the title of the property.

To clarify: Only the credit of the borrower whose income and assets will be used to repay the loan will be scrutinized and approved if appropriate. The other buyer – whatever his or her credit – can still be an owner of the property and therefore listed on the title.

In general terms, you should be careful about asking someone to be on a property title with you, especially if that person doesn’t have any responsibility for paying for it.

In some scenarios, when and if you want to have that person removed from the title, you may not be able to, and selling the property without his or her consent may also be an issue. Your real estate lawyer can advise you on these concerns.

A title represents ownership. The title documentation that you have, or will have, when you purchase a home, will be called either a “deed of trust,” or a “mortgage,” depending on your state.

When you hear the word “mortgage,” you may be thinking of a payment that needs to be made monthly. In fact, what you are paying each month to your lender is called a “note payment.”

Owner vs. borrower

Ownership is entirely different. It has nothing to do with making monthly payments. The title says who owns the property; the “note” says who is paying for it. When you sign this note at closing, you are promising the lender you borrowed from that you will pay back the loan at the terms specified. And you also put up your ownership interest (title) of the property as collateral against the note. As long as you keep the payments on the house current, it remains yours.

But what about foreclosures? A foreclosure is the process whereby the lender exercises the right to take ownership of a property when a borrower is far enough behind on the note payment to warrant it. These terms are all spelled out in the loan documents that you sign.

There are, in fact, many different ways to hold title, including “tenants in common” and “joint tenancy with right of survivorship.” They apply when the title holders are alive as well as after they die. Your real estate attorney can explain the available ways of holding title.