Title:
Legal Pitfalls of
Arranging a Mortgage
Word Count:
496
Summary:
Legal Pitfalls of
Arranging a Mortgage - A mortgage is often the biggest commitment a person
undertakes, and one should take time to consider all of the legal and financial
details before diving head-first into such an agreement.
Keywords:
Arranging
Mortgage, Mortgage,motgages, mortgage article
Article Body:
Copyright 2006
Tracey Anderson
A mortgage is often the biggest commitment a person undertakes, and one should
take time to consider all of the legal and financial details before diving
head-first into such an agreement. Your mortgage broker, banker, or real estate
agent can often be a good source of information about these details; if there
is still confusion, you may even wish to engage a solicitor to review your
contract, watch out for unusual or potentially harmful clauses, and explain the
details to you. Always take time to read the contract, and seek out third-party
advice if you do not understand it. An unscrupulous lender, broker, real estate
agent or seller may attempt to pressure you into signing an agreement without
reading it, or worse, yet, signing a blank form for them to fill in later.
Avoid succumbing to this pressure, and always understand what you are signing
before you have signed it. If you are being pressured to sign a contract
immediately without a thorough reading, then the best thing to do is walk
away.
Once you've found a house and arranged for the mortgage, the legal process of
transferring ownership between parties, known as conveyance, is very specific
and complicated. Your mortgage broker, lender, or real estate agent may be
familiar with the process, and may be able to give you advice on the matter.
However, the process itself must be done by a solicitor or registered
conveyancer. Alternately, a homeowner can choose to do the process individually
using a do-it-yourself kit. Conveyance naturally comes with a conveyance duty
which must be paid to the state, although in some states, you may be able to
qualify for an exemption if you are a first-time home buyer.
The property title itself, which in most cases is called a Torrens title,
establishes proof of ownership. Old System titles are more complicated, and
require the buyer to show clear title for every previous owner.
The issue of survivorship must also be addressed. Typically in the case of a
husband and wife, the home is held in joint tenancy, so that if one spouse
passes on, the other will retain the right to the property. If a home is held
in tenants-in-common, however, each tenant's share of the home is separate, and
in the case of death would become part of the deceased's estate. Under common
law, if no other arrangement is specified, joint tenancy is assumed.
Before buying a home, legal hassles can be avoided by executing a thorough
inspection. You can choose to inspect the home yourself, or hire a licensed
inspector. Either way, you will be able to gain knowledge about any existing
conditions of the home that you can use in your negotiations. Having knowledge
of the home's condition and any flaws or defects ahead of time will put you in
a better legal position, since it may be difficult to recoup any costs for
undetected flaws after the transaction has already been finalized.