Posted on: 14th Nov, 2006 10:41 am
I am in the process of trying to purchase a home via land contract. A friend has purchased the home and will let me lease for a year with the option to buy after a year. Once the year is up he wants me to repurchase the house from him. My question is instead of going through a finance company and purchasing this way can we do a quickclaim deed and if so will the mortage automatically transfer to me?
Hi,
"will the mortage automatically transfer to me?"
If you do a quit claim deed then the mortgage will not automatically get transferred.
You will then have to refinance the mortgage or ask the lender for a novation of the mortgage in your name.
"will the mortage automatically transfer to me?"
If you do a quit claim deed then the mortgage will not automatically get transferred.
You will then have to refinance the mortgage or ask the lender for a novation of the mortgage in your name.
Hi Karen,
With the land contract your friend will retain the mortgage and you will have to make monthly payments to your friend to cover the amount of the original loan. And no transfer of title of the home will take place until the loan is fully paid off.
Instead of land contract if you and your friend select the lease purchase option then you will have to pay rent for a year which will consist of the monthly rental payment plus an additional amount which will go to an account for use as a down payment.
Now if you opt to have quit claim deed made for the transfer of the home in your name, it can be done now or after a year as your friend wants. Any exsiting mortage on the home will not get transferred in your name and you will have to select refinance/novation to transfer the mortgage in your name.
You will have to discuss with your friend the option which will be suitable for you and then take the decision.
Let us know if you have any other queries.
Thanks
Blue
With the land contract your friend will retain the mortgage and you will have to make monthly payments to your friend to cover the amount of the original loan. And no transfer of title of the home will take place until the loan is fully paid off.
Instead of land contract if you and your friend select the lease purchase option then you will have to pay rent for a year which will consist of the monthly rental payment plus an additional amount which will go to an account for use as a down payment.
Now if you opt to have quit claim deed made for the transfer of the home in your name, it can be done now or after a year as your friend wants. Any exsiting mortage on the home will not get transferred in your name and you will have to select refinance/novation to transfer the mortgage in your name.
You will have to discuss with your friend the option which will be suitable for you and then take the decision.
Let us know if you have any other queries.
Thanks
Blue
Hi Karen,
You can get the ownership rights through the quit claim deed instead of purchasing the property. But I doubt whether your friend will allow it. And, if you have signed any written document stating that you will repurchase the property from him, then you cannot get the property merely by signing the deed.
However, if your friend agrees to sign over the property to you through the quit claim, the loan will not be transferred to you. The loan can only be transferred by novation and that too at the approval of the lender.
Thanks,
Caron.
You can get the ownership rights through the quit claim deed instead of purchasing the property. But I doubt whether your friend will allow it. And, if you have signed any written document stating that you will repurchase the property from him, then you cannot get the property merely by signing the deed.
However, if your friend agrees to sign over the property to you through the quit claim, the loan will not be transferred to you. The loan can only be transferred by novation and that too at the approval of the lender.
Thanks,
Caron.