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REAL ESTATE FINANCING ARTICLES

Tenancy in Common

Sale of Tenancy in Common Home

By Christopher Combs | December 1, 2019

Question: My next-door neighbor and I wanted to build a “spec” home in Peoria. My next-door neighbor then bought the lot for $100,000, and we took title to the lot as tenants in common. My next-door neighbor did not have good credit, so I took out the construction loan of $300,000 to build the home. The home has been completed with an appraised value of $600,000. If the home sells for $600,000, how will these $600,000 sales proceeds be divided between me and my next-door neighbor? Answer: In order to calculate the division of the $600,000 sales proceeds, you should…

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Foreclosure For Sale

Partial Payment Doesn’t Cancel Foreclosure

By Christopher Combs | September 8, 2019

Question: After our parents passed away two years ago, my sister and I became the owners of their home in Sunnyslope worth $280,000. My sister wanted to live in the home, so I deeded the home to her in exchange for her giving me a five-year $140,000 mortgage on the home. In addition to the monthly mortgage payments, my sister was to pay the property taxes and the homeowner’s insurance. My sister has never made one mortgage payment to me, and I have been paying the property taxes and the homeowner’s insurance. I finally hired an attorney to do a…

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Documentation Releasing Seller Carryback

By Christopher Combs | June 18, 2019

Question: Ten years ago we purchased 40 acres of vacant land near Coolidge with seller carryback financing. In other words, we signed a promissory note to pay the seller monthly payments secured by a deed of trust on the 40 acres of vacant land. The final monthly payment to the seller is due next month. When I make this final monthly payment to the seller, what happens? Answer: Seller carryback financing is a mortgage from the seller, just like a mortgage from Bank of America or any other mortgage lender. After you make the final payment to the seller on…

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Who Pays Reverse Mortgage When We Die?

By Christopher Combs | May 16, 2019

Question: My husband and I live in Leisure World in Mesa. We paid cash for our home. We have been talking to a neighbor about the benefits of a reverse mortgage so that we can get the money to do more traveling. If we get a reverse mortgage, who pays off the reverse mortgage when we die? I am concerned that our children will have to pay off the reverse mortgage. Answer: There is no requirement to “pay off” of the reverse mortgage when you die.  The reverse mortgage lender will sell your home, and after satisfying the amount owed…

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Mortgage Application

Can a girlfriend take over a boyfriend’s mortgage?

By Christopher Combs | February 11, 2018

Question: You had a recent column about a daughter not having to pay off the mortgage on a Phoenix home she inherited from her mother. You said that the daughter could just continue to make the monthly payments, even though there was a due-on-sale clause in the mortgage requiring immediate payment of the entire amount of the mortgage upon any transfer of the home. Here is my question: My boyfriend and I live in a home in Goodyear. Because of my bad credit, the deed and the $180,000 mortgage are both only in my boyfriend’s name. The $180,000 mortgage has…

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Transferring a Mortgage

Transferring a Mortgage after Death of Parent

By Christopher Combs | October 16, 2017

Transferring a Mortgage after Death of Parent   Question: In a recent column you wrote about a mother being able to transfer her Sun City home to her daughter either by beneficiary deed or by a small probate affidavit. If there is a mortgage on the Sun City home at the time of the mother’s death, will the daughter have to pay off the mortgage immediately?   Answer: Probably not. Although most mortgages have a standard due-on-sale clause that requires the mortgage balance to be paid off immediately upon any transfer of the home, most mortgages are governed by federal…

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Husband and Wife Must Both Sign HELOC

By Christopher Combs | April 30, 2017

Husband and Wife Must Both Sign HELOC   Question:  We have owned our Sunnyslope home as community property with right of survivorship for almost 20 years. The original mortgage is in the name of myself and my wife. We borrowed $100,000 on a home equity line of credit (HELOC) ten years ago.  We noticed recently that the HELOC is only in my name. Is this HELOC legal?   Answer:  Yes. Although the HELOC is legal, the HELOC is not enforceable as a mortgage against the home. The reason is that the signatures of both the husband and the wife are…

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What Is a Wrap Around Mortgage?

By Christopher Combs | February 27, 2017

What Is a Wrap Around Mortgage?   Question: My husband recently passed away. I want to sell my Scottsdale condominium and move back to Iowa to be closer to my children. Our home is worth $220,000 and our Wells Fargo mortgage is now only $65,000. My son in Iowa is a real estate broker and says that I should be able to sell my home quickly using a “wrap around” mortgage. When my son tries to explain what a “wrap around” mortgage is, I become confused. Can you tell me what a “wrap around” mortgage is? Would a “wrap around” mortgage…

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