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ksloomis · Joined: 23 Apr 2007 Posts: 2 1.64 Dollars($)

My mother has been paying much of the mortgage on my brother's house. I suggested she take over the house, so that equity isn't lost if she stops paying the mortgage for him. She would refinance house in her name. Which is more appropriate - quit claim deed or warranty deed?

miller_st · Joined: 17 Jan 2007 Posts: 918 168.95 Dollars($)

Hi Ksloomis,

A warranty deed cannot be used as there is mortgage lien on the house. In this situation a quit claim deed will have to be used.

Warranty deed is used when the grantor can warrant a clear title to the grantee, which is not possible when there is a mortgage.

Miller

ksloomis · Joined: 23 Apr 2007 Posts: 2 1.64 Dollars($)

What happens to the existing mortgage in a quitclaim deed? If my mother is re-financing to get mortgage in her name anyway, isn't it all the same as if she just buys the place from him outright?

blue · Posted: Mon Apr 23, 2007 10:49 am Post subject:

Hi Ksloomis,

Welcome to Mortgagefit discussion board.

If you use a quit claim deed for transferring the house, then also mortgage will have to be refinanced. It will be same if she buys it from your brother instead of a quit claim deed being used for the purpose. In case it is sold a warranty deed could be used.

Do let me know if you have any other questions.

Thanks
Blue

Caron

Hi ksloomis,

Since there is already a loan on the property, your mother will have to use a quitclaim deed. This is because the title to the property is not free of any lien as there is a mortgage. And, warranty deed is usually used when the title is clear and free of any kind of lien.

When your mother refinances, it would mean that she is talking out a new loan in order to pay off the current loan. And, for this she needs to have her name on the title, which can be done by using a quitclaim deed.

Refinancing and buying are two different issues because when you buy a home which already has a mortgage, you need to pay the purchase price which is not required in a refinance. Here you are taking over the title without paying the purchase price.

In buying, you need to assume or take over the responsibility of repaying the loan on the property which you will buy. For that, you need to get the approval of the lender who will allow you to take over the loan provided you satisfy all relevant criteria.

Hope I could help you.

Good luck Smile

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quitclaim versus warranty deed