Our Paperwork is wrong: Should we just sign it to close on time?

ID-100126322

Succinctly Put: NO!  Now, let me tell you a story:

“Wally” and I are working to refinance a home he bought on Contract for Deed. He and his wife divorced in 2002 and over five years later, he purchased his current home on Contract for Deed (CD).  When he signed the CD, it listed him and his wife as a married couple.  He asked about it and was told to simply sign it to avoid from having his closing delayed.

If he didn’t sign, he would be stuck trying to find a place to live for 3-4 days as well as juggle scheduling the movers to name a few of the biggest stresses.  So, he goes ahead and signs the form as-is and moves in that afternoon.

Flash forward to present and he is finally at a point to officially move this CD into a mortgage in his own name and own the home outright.  Here’s the rub: A Contract for Deed is a legally filed and binding document. This means that his ex-wife, is now signed into title as his now current wife, giving her full ownership rights to the new home.  HIS EX-WIFE NOW OWNS HALF OF HIS HOUSE!

In an amiable situation like this one, this can be resolved by having her sign a Quit Claim Deed that relinquishes her ownership rights.  Fortunately for Wally, She was willing to sign a QCD.  If she hadn’t, Wally would have a potential legal battle on his hands and I’m sure the topic of ‘Fraud’ would be brought up as well for knowingly signing a document he knew was not accurate.

Simply put, making moving arrangements or postponing them can be a huge hassle, but if there is something incorrect on your final mortgage documents, you need to take a step back and consider the long term issues that can end up being much more damaging.

-Matt

 

Image courtesy of phanlop88 / FreeDigitalPhotos.net

Family communication with a home purchase? Yes, I do that too!

ID-10020259

Image courtesy of jscreationz / FreeDigitalPhotos.net

This past August I was helping a young couple purchase their first home.  It was as simple and straight forward as could be.  Julie’s parents were kind enough to help out with the down payment by giving a gift to the young couple.

The Bank had everything they needed well in advance of closing from Jim and Julie and we had a signed gift letter from Julie’s parents.  There was only one item left for us to issue a final approval and be ready to close.

If you have purchased a home in the past 2-4 years, you may be aware of how much additional documentation is needed from the mortgage applicant these days compared to 5-10 years ago.  Obviously, a first time home buyer would not be aware of how extensive this can be until they enter into the process.  With gift funds, the money needs to be traced from start to finish, meaning we need to show the account the money came from and the account that received the money to coincide with the provided gift letter.  This is where we hit a brief impass.

Julie’s father refused to provide the account statement showing the money leaving the account.  I asked Julie if it would be alright for me to talk to him and explained to him the process and why these provisions had been put in place, he began to understand even though he didn’t agree with it (who does?).  The next big quirk was that he did not want Julie to see his financial account information as he felt it was an invasion of privacy as well.

I came up with a solution to our speed bump after a little thought.  For the same reason, he would not fax the information to me or send it digitally via email because he didn’t trust technological security. What we decide to do was a little cumbersome for Julie but it solved the issue.  We had her father seal the account in an envelope and have Julie hand deliver it so we could bypass the post office, the computer and the fax machine yet still get the information we needed in my hands.

Now, I’ll never be sure what his reasons were and I’m content with the fact that it’s none of my business. What I am content with is that despite an issue that literally could have cost his daughter the ability to buy this house, we found a solution that would calm his concerns and still let me get the required information to the Lender.

Julie and Jim are expecting Twins this spring…I couldn’t imagine them trying to fit the new additions into their apartment.

Buying a home out of state: How to navigate a cross country move.

ID-10045399

Image courtesy of Ventrilock / FreeDigitalPhotos.net

It can be very intimidating to sell a house and buy one at the same time with logistics and coordination at the very minimum.  Now, add in one more wrinkle, buying a house out of state and let me know if the stress levels drop or rise.

Just the thought of it, sends a tingle up my spine.  It’s a lot to process emotionally.  Over the years, I’ve come to conclusion that there are 3 critical steps that need to occur to help ease the process and each of those 3 comes down to people.

1. This may be the easiest: Find a Realtor you know and trust to sell your current home.  Don’t know one, then talk to the friends and family you trust to get a good referral. If this is not an option, then calling and talking to a few local ‘experts’ will be in order, the key here is to trust your intuition.

2. Find a trusted Realtor to help buy.  This one is going to be more difficult but is in many ways more important because you will most likely have very little time to search through home after home. In most cases, clients fly into town for a week, sometimes only a weekend and need to see as many houses that fit their requirements as possible.  A good Realtor will get to know you and what’s important for you in a house so they can scout for you.

3. Find a local Mortgage Broker (ideally) or Loan Officer.  This person will be critical in ensuring that after packing up the moving trucks and driving across the country (now homeless from your recent sale) that you will be able to move in as planned.

So how do you find 2 and 3?  When Jim and Julie (why are all of my clients named Jim and Julie…), were moving from Iowa to St. Paul to be closer to their kids and new Grandchild they were lucky to have a Son-in-Law and Daughter who had also recently just purchased a home.  Because of that they were able to use their trusted Realtor and Mortgage Broker to help them through each step of the process, answer any and all questions they had and set their expectations so no last minute surprises would come up.  After 14 years, I’ve walked clients through this exact process from Idaho, Wisconsin, Iowa, New York, Texas, Arizona and California off the top of my head. The questions are always different, but the fears and worries never change.

Okay, so what happens if you don’t have friends or family that can suggest someone?  Then we need to dig deeper into YOUR story and why you are moving. Is it for a job relocation? Are you just in need of a change of pace and like a lot of cold winters in Minnesota?  Somehow, I don’t see here being a vacation hot spot.  My point being, there is going to be someone you know, that lives in or near the area in most cases, or at the very least, someone who has a vested interest in your well being. Let them help.  If they don’t know a guy, they probably know a guy who knows a guy.

It’s a very simple premise, talk to the people you know and trust.  It’s the reason why I send many of my clients to other professionals when they are in need for insurance, financial planning or even a painter.  My clients know and trust me, or they wouldn’t be working with me.  Because of this, they know that I would only send them to someone that I trust to do their jobs as well as I aspire to do mine.

Divorce and your Mortgage

ImageImage courtesy of arztsamui/ FreeDigitalPhotos.net

Divorce is never easy. Divorce is never simple. Unfortunately, it becomes even more complicated when you own a home.

I have dealt with helping couples through the refinance process and divorce so many times over the past fourteen years that I feel I have it down to a science.  The first part is very simple, the person getting the home, has to refinance a new mortgage solely in their name.

It’s the second part that gets tricky, especially if you care about your clients like I do. Earlier this year, I was working with mother of two young children and helping her navigate the refinance waters. Even though the actual refinance process can be done in 30-45 days, I was working with her for close to 9 months to make sure everything was done correctly from start to finish, BEFORE the divorce decree is negotiated and finalized. We start the refinance AFTER the decree is 100% legal. This can take months.

When a family planning attorney refers me a client in this situation, the first thing I do is walk them through what steps we will want to take to protect them in the divorce negotiations such as having an appraisal done to start the negotiation process. I then prepare them for the emotional hurdles that will come up.  In this case, the current mortgage was not in her name, just her soon to be ex-spouse. So we were going to have to include him in this process either with her calling/talking with him or via her attorney.

As you can imagine if you haven’t been through divorce, this is one of the most emotionally difficult things someone can go through and doubly so when the divorce is not amicable (in my experience, they rarely are). Looking over the entire divorce process, my job no longer is simply about logistically finishing the refinance.  My job is to listen, to help keep my client focused on putting themselves in the best position for their future and most importantly, to listen.  Yes, I listed listen twice.  It’s THAT important.

Once the pain of the divorce settles, I want my client to look back years later and be thankful that I helped them use this opportunity to best plan for the next phase in life and retirement.  Not only did I help her refinance into a mortgage that would put her further ahead in 10 years than she would have been before the divorce, but I also walked her through setting up her own retirement savings plan and budgeting for a family of 3 with an income a fraction of what she had been working with prior.

By the time her kids reach college, she won’t be thinking about the divorce, she will be thinking about the plan we put in place to allow her to pay for her Children’s future…and that makes my heart swell with pride.

– Matt