Tom and Bev's Blog

In part 1 of last weeks blog. I discussed financing tools.  This week in part 2 of my blog, I will be discussing ownership tools. 

Ownership tools include different types of ownership warranty deeds.  These are different in most states and on most applications.  Here are some examples of the different ownership warranty deeds out there:

A covenant against encumbrance deed is applicable when a grantor states that the property is free of any encumbrances or liens other than the ones already told about.  Basically, the buyer is guaranteed that a third party cannot get a title on the same property. 

A statutory warranty deed is a special deed that is most commonly used by trustees and executors and is not as protective of the buyer as others are.  The grantor of the deed delivers the property with two warranties.  One, the grantor states the title has been received and two, the grantor states that during ownership the property was not encumbered.

Bargain and sale deeds are most commonly used in tax sales and foreclosure auctions and do not protect the buyer from any encumbrances.  It only implies that the grantor hold the title to the property.  This does not guarantee a good title from the grantor.  This could give the grantee some trouble if defects later appear. 

Quit claim deeds are most commonly used to transfer property between family and friends.  This is the least protective of all deeds for the buyer.  This deed does not provide any covenants or warranties to the buyer.

Trustee's deeds are used by a trustee, in the event of bankruptcy, to sell the debtor's property.  This deed can only be executed by the trustee.

A sheriff's deed is given to the buyer for ownership rights at a sheriff's sale.  These sales are usually held to pay court judgments that are against the property owner. 

If you still have questions about financing and ownership, contact us.  We are always here to give a helping hand and guide you through the process.

I'll start by telling you that there is a difference between financing tools and ownership tools.  And, because there is so much to understanding regarding everything associated with buying a new home, I will break this up into two blogs.  This blog I will start with financing tools and the next I will go over ownership tools. 

Most new homebuyers have many questions about warranty deeds, mortgages, contracts and trust deeds.  Some know these common terms when buying a home but really don't understand what they mean or how they work.

Financing tools include mortgages and trust deeds. 

A mortgage is a legal document where one person or party promises to pay the lender for the total amount of the home plus financing fees. 

A trust deed is unlike many other deeds.  This deed transfers the land tile to a title company or a trustee.  After the loan has been paid by the borrower, the title is then transferred to the borrowing party.  Keep in mind, the trustee has no power over the property unless the borrowing party defaults on said loan.

The difference between a trust deed and a mortgage is that there are only two parties involved in a mortgage; borrower and lender.  And, there are three involved in a trust deed; borrower, lender and trustee.  Another difference between the two is the way the foreclosure process is handled  if the borrowing party defaults on said loan.  A deed of trust allows the foreclosure process to go faster.

Seller financing sometimes comes into place when a seller owns the property and is willing to be the lender.  The seller is completely free of any debt, and is willing to let the buyer pay him/her a monthly payment.  The seller basically becomes the mortgage company.  After the full selling price has been paid, the seller will then turn over the legal title of the property to the buyer.  These types of seller financing contracts vary from seller to seller.

Check back next week for Understanding Warranty Deeds, Mortgages, Contracts, and Trust Deeds - Part 2.

If you're looking to invest in your financial future, then the most positive thing you can invest in is a home.  And buying a home now, while we are in a buyers market, is the best way to do it.  Buy low now, sell high later.

In today's market you can buy a home for 5% to 10% lower than the asking price.  That's a savings of $5,000 to $10,000 off your mortgage.  With a 30-year fixed rate mortgage on a $200,000 home, you can save over $100 a month.

There are tons of properties to choose from, and all at great prices.  So go get pre-approved for your home loan and start house hunting.  A great place to start is the Internet.  There are many websites listing homes for sale that give you information about the property.  Or, find a real estate agent to help you in your search.  Real estate agents have all the resources needed to help find the perfect home for anyone.

Are you one of the many homeowners trying to build equity in your home?  If so, there are many ways you can do this and raise the value of your home. 

First, you should know that cosmetic things like new carpet, landscaping or new paint will not raise the value of your home.  These are all nice and will help sell your home faster but not for more value.

Here are some things you can do to raise the value of your home:

~ Finish a basement

~ Update old siding

~ Add a room to your home

~ Update your home's roof

~ Finish a lofted area

~ Add a garage to your home

~ Put in a swimming pool or Jacuzzi

~ Add a sunroom

~ Build a deck

~ Add an outdoor living room, kitchen or other outdoor living space

All these are great ways to build equity and add value in your home.  The biggest reason for adding value to your home is for more livable space or to update something old and structural.

There is another way to build equity in your home if you're not up to the task of adding onto your home, and that is paying more on your mortgage.  Paying 13 mortgage payments each year instead of twelve, will help you pay off your mortgage seven to ten years earlier.  This builds equity quite fast.