Q–Why does it cost so much every time you refinance a mortgage? When we bought our house, it was appraised, title insurance was bought and our credit was checked. So why does it all have to be done over?
A–When refinancing, the old mortgage is paid off and a new mortgage is created. To create a new mortgage, which is ultimately sold to investors, all the work of creating the original mortgage must be repeated. The new investor wants a current report, appraisal, etc., and new documentation must be created.
The cost of refinancing pays for all the necessary work–the same things that are done when getting a new loan. Refinancing is an act creating a new mortgage loan, which is ultimately owned by a new investor.
Some mortgage companies and banks give borrowers a price break when refinancing.
You do not have to refinance with the lender who made the original loan. Shop around and ask about the cost of refinancing.
Q–I want to sell my rental house to the tenants on a contract for deed. The couple living in it are not married. If both sign the contract, and one later moves out, do I deed the property to the remaining person? How do I get a quit claim deed to give them?
A–Do not attempt to complete the sale (or purchase) of real estate without the advice and counsel of an attorney with significant experience or training in real estate. Some attorneys, in an attempt to save a few hundred dollars, may create problems that will cost your thousands of dollars to correct.
When selling property on a contract for deed, the property is not delivered until the terms of the contract are fulfilled. When a property is sold to two unrelated persons living together, one moving out does not terminate his or her interest in the property. Any conveyance of title must be to both parties unless one has sold his or her interest to another.
Standard forms for purchase agreements, contracts and quit claim and warranty deeds are available at office and legal supplies stores.
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Have a question about real estate? You can write to George Karvel in care of the Chicago Tribune’s Your Place section, 435 N. Michigan Ave., Chicago, Ill. 60611. Answers will be provided only through the column. Please note that laws vary from state to state and area to area. Consult an attorney for specific legal advice.
