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| *Loan,banking and credit>>>mortgage loan |
Whats the difference between being on the loan or deed of a home mortgage? |
Whats the difference between being on the loan or deed of a home mortgage? All the info is here. Source(s): http://www.mortgage.jims-info.com/... if you're on the deed, you own a portion of the property and have rights to it, depending on what kind of deed and what kind of stipulations were agreed on. if you're on a mortgage, it doesn't mean you actually own any part of the property. Being on the loan (e.g., as a co-signer) means that you are as liable for the debt as the principal borrower. If (s)he goes bankrupt, for example, the lender is going to sue you for all of the money due, even though you might have no ownership in the property being bought. This is sometimes referred to in the legal profession as the "pure heart, empty head syndrome." You would only want to co-sign a loan for a child, spouse or someone you REALLY trusted to pay it off. A note is the evidence of the loan itself. A mortgage is a written document which refers to the note and gives the lender a lien on the real estate until the loan (i.e., note) is paid off. Then, the mortgage is released. Being on the deed, means that you are co-owner of the real estate being purchased or transferred. It is a different concept entirely from the loan used to buy the property. A deed is a legal instrument identifying the parties in title to the subject property and their percentage of ownership and the terms and conditions of that ownership. A mortgage loan consists of two parts, the deed (as referenced above) and a note for the balance due. You can be on either or both unless the title transfer occurs at closing on t\a purchase. In that case, most investors require that anyone on the deed also be on the note. Sometimes parents will add their children on the deed at some point to try to avoid probate on a property. Sometimes parents go on the note and deed to help children buy (although the occupying borrower still has to qualify except on an FHA loan). The potential problem with being on the note and not on the deed arises when the occupying borrower defaults on the payments. Everyone on the note is equally liable for the repayment of the note. |
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