Does a Refinance Alter the Deed?

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    Refinancing

    • Homeowners refinance property to realize better loan terms or to cash out equity from the property. Specifically, homeowners choose to refinance property to avoid adjustable rate mortgage fluctuations, to lower interest rates and monthly payments, to reduce or extend loan terms, or receive cash from the equity in the property. Individual lender requirements for refinancing depend on the equity available in the home, the owner's credit rating and income, and other factors.

    Home Affordable Refinance Program

    • At the time of publication, qualifying for a refinance is not an automatic process because of the many lender requirements. The federal government has a Home Affordable Refinance Program that offers homeowners a better chance of qualifying for refinance in certain cases. Generally, the requirements for this program are not as stringent as most refinance loan programs. Most homeowners will qualify under this program if they are current on their mortgage payments, Freddie Mac and Fannie Mae own or guarantee the loan, the first mortgage is not more than 125 percent of the home’s value and they want to refinance an ARM mortgage into a fixed-rate mortgage loan.

    Quitclaim Deed

    • A quitclaim deed is the fastest and easiest that property can transfer from one party to another. This type of deed only transfers the rights the existing owner has on the property and, therefore, does not offer some of the warranties available with other types of deeds. Family members often use quitclaim deeds to transfer property from one family member to another. Although owners should use professional or legal help whenever transferring a deed, it is possible to execute a quitclaim deed without this type of assistance.

    Considerations

    • The type of deed associated with a property dictates how the grantee obtained the property. The Internal Revenue Service, state and local tax authorities can place lien on a property for unpaid tax obligations. If the owner does not pay the tax to the taxing authority, in some cases, the tax authority can sell the property using a tax deed. A deed of trust does not express the title in the property. Banks and financial institutions use this type of deed to attach a lien for a loan secured by the property. When the owner refinances a property, the lender will most likely obtain a deed of trust. However, this document does not affect the ownership of the property. Title companies issue warranty and grant deeds that offer a guarantee on the title when purchasing a property.

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