Property Title

Archive for December, 2010

Understanding Mortgages – What is a Lien?

December 30th, 2010

When discussing mortgages, one term that often arises is “lien.” A mortgage is not a loan, but a lien on the property that keeps the loan secure. It is important to understand this confusing term in order to properly understand mortgages and property ownership.

A lien is a hold on your property so that is can be used as collateral for money or service you owe to another party. A lien can keep the borrower from selling a piece of property by preventing the transfer of property title to a new party. Liens are often involved in situations in which one person or party has loaned money toward a substantial item in the possession of a borrower, such as in a mortgage. A lender can force the sale of any property that has a lien in order to collect money owed from the borrower. If instead the borrower decides to sell the property, he or she must pay the lien-holder before the property title can be transferred to the buyer.

One common example of a lien is a construction lien. When a property needs repair, maintenance, or renovation, the property owner often hires someone to do the work. After the work has been completed, the property-owner is legally obligated to pay for the improvements to the property. The lien exists in order to help ensure that a construction worker can be properly compensated without having to sue the property owner.

If you have decided to purchase property, you should make sure that there is no lien on the property. A lien on the property may mean that the person attempting to sell the property is not the legally recognized property owner. Therefore, a lien can prevent you from securing a clear title, and you may not fully own the new property you have purchased. You can hire an abstract company to conduct a title search by delving through public records concerning the property’s history to be sure that no lien exists. The title search should also indicate if the seller is legally recognized as the property owner, the description of the property, and details of any lien or other holds on the property.

A mortgage is one type of lien. Therefore, a mortgage is not a loan in and of itself, but rather a way for a lender to secure property rights while the borrower still owes money. Although the term “mortgage” is often used interchangeably with “loan,” the two are indeed different. Before deciding to buy or sell property, it is important to be fully informed about legal issues surrounding mortgages and titles to be sure that you fully own the property.

For more information about loans, mortgages, refinancing, and other issues, visit the website of the Milwaukee bankruptcy lawyers of the DeLadurantey Law Office, LLC.

By: Joseph Devine

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Joseph Devine

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Tags: Understanding Mortgages

A Guide to Property Conveyancing

December 30th, 2010

Property conveyancing
Conveyancing is the transfer of property titles from the present owner to someone else. The process includes an exchange of contracts (equitable title passes) and the completion stage (legal title passes).

In England & Wales, this process is usually undertaken on behalf of the property buyer & sellers by a conveyancing solicitor (or property solicitor) although it is possible to undertake the process yourself. Under English & Welsh law, agreements are not considered legally binding until contracts have been exchanged. This can result in wasted expense & effort if either buyer or seller pulls out prior to exchange. In order to minimize this, Home Information Packs have been introduced (since August 2007) as a means of the property seller providing the information & thus saving the buyer the expense of undertaking local authority searches etc.

It is recommended to engage a solicitor who is regulated by The Solicitors Regulation Authority.

Costs & fees
Solicitor’s fees can vary although are considered to be quite competitive in comparison to those charged in some other countries. Many will work on a fixed fee basis with additional charges to cover items such as BACS transfer fees and local authority searches.

Timescales
The process of property conveyancing will usually take up to 3 months depending on a number of factors which can include agreement to existing covenants, production of necessary guarantees for works undertaken (such as damp courses etc) and planning permission for extensions and release of funds by mortgage providers etc.

Gazumping
As acceptance of offers are not legally binding until the exchange of contracts, the act known as gazumping can occur when the property’s seller withdraws from the sale process to accept a different (usually higher) offer from a 3rd party. More recently, the underhand practise of gazundering has developed which is the method of the buyer demanding a reduced price at the latter stages of buying a property.

Conveyancing in Scotland
The process of conveyancing works somewhat differently in Scotland than in England & Wales – primarily because contracts are exchanged at a much earlier stage of the process after the initial offer and once this is accepted by the seller, is legally binding. The contract is formed by missives which are letters between the solicitor on behalf of the buyer and seller of the property. Normally the contract is conditional on matters such as the seller being able to prove they are legally able to sell the property.

This method of early stage contracts means that gazumping is much rarer in Scotland than in England & Wales.

Checklist
Request quotes from a variety of local, reputable solicitors. Ensure (wherever possible) that the solicitor is regulated by The Solicitors Regulation Authority Provide details of your mortgage offer in principle Provide details of the estate agent managing the sale

By: Brad Warwick

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On behalf of reallymoving.com – An online service designed to make moving home in the UK easier with free instant quotes from conveyancing solicitors and other services.

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Tags: England

What is Title Insurance and Do You Need It?

December 30th, 2010

A home’s title is as important as the physical building and land it occupies. A title insurance policy offers protection against any unforeseen ownership claims that may arise after you buy a new home. It keeps your money and investment safe, insuring that you are protected if there is a question of ownership.

Although it sounds unlikely, the unfortunate truth is that ownership questions are not that uncommon. Whenever you buy a home, your real estate agent or title company will run a title examination or title search to verify the ownership of the property that has just been bought. This examination and search consists of collecting and examining any and all public records that involve the title to the property in question. These records include wills, liens, deeds, and trusts and can prove that the property has correctly and legally passed from owner to owner. The examination also confirms that all judgments and mortgages concerning the property have been completely paid.

Wonderfully, most often the title search will return with a clear report; however, occasionally a slight problem will appear. Sometimes called a ‘defect’ or ‘cloud,’ these problems are things like missing signatures or easements and other right-of-way issues. These should be settled and reviewed before any purchase is considered final.

Less often, legal battles can ensue from ownership questions that arise from the title search. You risk paying expensive legal fees and possibly losing the property that you thought you just paid for; thus the existence of title insurance. Title insurance pays your legal fees, and if you lose the property, reimburses you up to the policy limit. Just like other types of insurance, though, title insurance policies can contain certain exclusions and riders. It is important to make sure you know what type of policy you have, what is covered and what is not covered. For example, some title companies offer only limited coverage of easement, lien, or mineral rights problems; sometimes they do not offer this coverage at all. Consider what coverage you need before you buy a title insurance policy.

Do you need title insurance? Most mortgage companies require at least some type of title insurance. They have quite an interest in the property and do not want to lose their investment. If you are paying for your new home outright, however, you can decide whether or not title insurance is right for you. Usually, the home buyer is responsible for purchase of title insurance, if any, but as a condition of the sale the cost may be transferred to the seller. Ultimately, the decision is yours.

By: Suzanne Bender

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GuidesToProperty.com offers you home buying tips and mortgage option advice. Don’t be shocked by your lawyers bill – Before you buy a new home, make sure you are aware of the dreaded closing costs first!