REAL ESTATE SCHOOL BY JULIANNE E. MURRAY, ESQUIRE
I started Real Estate School because buying a house is probably the most significant purchase you will make in your life. I think it’s important to have some general knowledge about what goes on in the transaction as well as an understating of some of the documents.
3 IMPORTANT DOCUMENTS: DEED, MORTAGE, AND NOTE
There are 3 documents I want to explain in this installment: deed, mortgage, and note
A deed is a document that transfers ownership from one person or entity to another. It is signed by the current owner only and conveys that the owner’s ownership interest to a new owner. The deed will include the name of the seller or sellers, the name of the buyer or buyers and the legal description of the property. The legal description is more than property address and is typically in a form called metes and bounds.
A mortgage is a financing arrangement in which the person buying property (or one who already owns the property) receives a loan, and the property is pledged as security to guarantee repayment of the loan. The mortgage itself is a document that gives the lender the right to have the property sold to repay the loan if the borrower defaults. If the borrower defaults, the lender may reach the land to satisfy the debt by proceeding with judicial foreclosure. This is a lawsuit in which the borrower is evicted and the property is sold under the supervision of the sheriff.
A note is the buyer’s personal promise to make the repayments. If there is a foreclosure against the property and the foreclosure sale does not make enough to cover the outstanding mortgage debt, the note serves as the basis for a deficiency judgment against the borrower for the balance still due.
So there are the three important documents that are all recorded at the Recorder of Deeds and identify you as the owner and the nature of your ownership. In my next installment, I will discuss the HUD-1 settlement sheet. In the meantime, if you have any question please feel free to call my office at (302) 855-9300. We are just off the circle in Georgetown at 215 E. Market Street.
Here is the disclaimer: This information is NOT intended to be an all-encompassing explanation of the law. It is designed to give you an overview only. You should ask for further information or clarification if you want more details.