Chris Griffith: Quit claim refis and mortgage questions

CHRIS GRIFFITH

A couple of great mortgage questions have come in over the last few weeks…

Question: We’re considering selling our place and purchasing another and we would like to do back to back closings. Is this something that can be done?

Not everyone can pay cash for real estate and there are consumers taking advantage of the great prices to move around or upsize. Much like stacking rows of dominos, counting on one closing to fund the next closing is a tricky position to get into. Besides a homeowner having to sell one to get into the next home, there are circumstances where the actual buyer of your home must close sale on the home they live in to be able to purchase your home, you must close sale on the home you live in to be able to close your own new home purchase.

There are one hundred and one possible ways that back to back closings can go haywire. They can also go well, but it really takes some homework and investigation of the contracts and mortgages involved in each transaction in the long line of dominos. Plus, even as careful and thorough as everyone can be, things can still go wrong; last minute underwriting issues, a lender decides not to fund mortgages in the state of Florida, one of the borrowers loses their job in the process, one of the borrowers financed another big ticket item and no longer qualifies for the mortgage, if it’s a condo and the condo questionnaire goes hinkey. The list of last minute surprises can go on.

Like I said, the situation is tricky and you most seriously need to have an experienced real estate agent and very good mortgage broker who understands your situation inside and out or you could end up wondering where you’re going to sleep and where to park that moving truck full of your possessions.

Question: Is it possible to finance the down payment or closing costs for a home purchase?

The short answer is there are a few mortgages available where this is possible, but it’s not possible with all mortgages. The long answer is you need a superb mortgage broker who can direct you to the proper mortgage product and determine whether the property you’re interested in qualifies for that particular type of mortgage. There are a few mortgage products which may allow you to roll in the closing costs as long as the purchase price, which may include a sum or percentage for fees, is supported by the appraisal.

Question: We’re breaking up and my spouse would like to keep the house and has asked me to sign a quit claim deed to get my name off of the house. Is it really as simple as filing this new deed with the clerk’s office?

Call a real estate attorney before you sign anything. I’d guess that the first question an attorney will ask you is if there a mortgage on this home and is the spouse also refinancing to take you off of the mortgage? If not, you could be relinquishing ownership of the home by signing the quit claim deed but still be responsible for the mortgage.

Not only financially responsible for that mortgage but also jeopardizing your ability to qualify for other large purchases down the road, like a new car or another home because the debt from “the quit claimed home” shows on your credit report. It’s worth seeking professional legal advice to make sure you’re doing the right thing and not making a poor financial decision in haste.

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Chris Griffith is a real estate agent at Downing-Frye Realty Inc. in Bonita Springs. If you have a question about local real estate or Bonita Springs, e-mail her at chris@LifeInBonitaSprings.com.

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