Refinancing and title company question. (1 Viewer)

[Luc]

OK, this is the first time I'm refinancing after buying my first house one year ago. Me and wife and my mom got the loan at the time of purchasing and all 3 of our names were on the title and the loan. Buying a house in SF area is very expensive as you all know so my mom was there to help with some of the downpayment and to help us get the loan amount. In reality, we're on our own with all the mortgage payments.
Now a year later, my wife and I are refinancing (without my mom) the house on our own because we make enough now and interest rate is lower. How does title company work. Do we get a new one and resign the title of ownership? Does my mom have to be there to say she does or does not want to have her name on the title? Or can my wife and I just do all the signing with the new title company with only the two of our names on the title without my mom's present/signature of any sort? Again, only my wife and I are going through the refinancing. Thanks in advance.

 

[Mike I]

If all three of your names are on the title and mortgage than you have to have a quit claim deed done to get your moms name off removed from the title...It can be done on your own but I would recommend a lawyer..It is not complicated, so a lawyer should not charge that much..Maybe a 100 or 2...
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[Jeff Ulmer]

I think you are dealing with two things: one is the land title registry which your local government holds, which is the official record of who owns the property, the second is the mortgage financing arrangements.
I don't think switching the mortgage over is any big deal, you should be able to secure that after a credit check and the usual bank prodding, but you would certainly need some sort of documentation to have the title registry changed. You'd have to call the land registry office and explain what you are doing and see what they say. There is usually an administrative fee for changing the registry, at least up here.
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[Luc]

Perhaps I have confused myself. Maybe those of you who have refinanced their home loan can tell me if there are any addition paper signing pertaining to title and the likes. I thought there is but I think I'm wrong by the answers given above.
My wife and I are the only one on the mortgage loan in the refinancing. We already have been approved and things are set. Now we're just waiting for the broker to call us with paper works. Will these only pertain to the banking side or is there a whole new set of title paper signing? And if there does need to be title company change and signing, does it just involve the two of us who are refinancing and carrying the loan or does it involve my mom who was part of the previous loan and have her name in the title?

 

[Robert McDonald]

Luc, it sounds like you, your wife and your mom are all owners of the house. With interest rates down you want to refinance. I am a Florida attorney practicing real estate, so take this with a grain of salt (i.e., ask a California lawyer), but in Florida:
You can refinance the loan without taking your mom off of the title IF you mom is willing to sign the mortgage (I think in California they are called a Deed of Trust or a Mortgage Deed). The bank may not necessarily require her to sign the promissory note (that will be a decision they make based on the income of you and, presumably your wife); but because your mom is a co-owner of the house she has to sign the mortgage in case the bank has to foreclose the mortgage. If she didn't sign the mortgage they could foreclose out your ownership interest but not hers, so the bank would own the house with your mother; thus, they will require her to sign the mortgage.
If you want to change the ownership of the house then there will need to be a deed of some sort signed by your mother through which she conveys her interest in the house to you and your wife. If she does that then the bank would not require her to sign the mortgage. In Florida you would have to pay documentary stamp taxes on the deed from your mother to you/your wife; don't know about CA.
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[Luc]

Robert,
Thanks for the reply. What you said make sense but my head is spinning now.
So, I assume these are my 2 options:
1) To have only me and my wife on the mortgage would require the removal of my mom's name from the title (she don't care)
According to your explanation, the bank will not let me refinance without my mom's signature.
2) Add her name to the mortgage (all 3 of us don't like this idea).
Well, the loan has been approved and things are in motion and we're waiting for the signing. I expect the broker to call us and said we can't do it because they discovered that my mom's name is on the title. This is confusing....

 

[Jeff Ulmer]

If your mom doesn't care about being on title, then I would call whoever is in charge of land registry in your area and find out how to have her removed from the title. Once that is done the mortgage is a nonissue. I would agree that the bank would want some recourse against all interest in the property if they had to foreclose.
It would also depend on whether your mom is on title or merely cosigned the mortgage. I would discuss this with the mortgage broker and land registry to find out your options.
I don't know the regulations down there, but there are tax liabilities if the house isn't your primary residence should you go to sell it, which in your case, I'd assume your mom would be hit by (capital gains). In this case she may be better being off title, at least by the time you go to sell. There may be other issues in transferring the title that would best be talked about with an attourney or accountant.
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[Robert McDonald]

See MikeI's post above; a simple Quit Claim Deed should do it and it shouldn't cost more than $100-200 to prepare; but, I don't know what, if any, transfer taxes would be due.
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