Who Has The Deed To My House If I Have A Mortgage?
When you buy a home, you may assume you fully own it. However, when there’s a mortgage involved, the true owner of the home’s deed can be more complicated than it seems. In this article, we’ll explain who holds the deed to your home while you have a mortgage, why it matters, and how it affects your ownership rights.
What Is a Property Deed?
A property deed is a legal document showing ownership of real estate. The deed includes the names of the property’s owners and provides proof of their ownership. It’s typically recorded with the local government. The deed is transferred from the seller to the buyer when you purchase a home. But there’s a catch if you’re taking out a mortgage to buy the house.
How Mortgages Affect Deed Ownership
The lender doesn’t keep the deed when you finance a house with a mortgage. Instead, you’re considered the legal owner of the property. However, the lender is interested in the property as collateral for the loan. This gives the lender certain rights if you fail to make payments, but it doesn’t mean they hold the deed.
Title vs. Deed: Understanding the Difference
The terms “title” and “deed” are often confused. The title represents your legal ownership rights to the property, while the deed is the physical document that proves that ownership. Even with a mortgage, you hold the title to the home. Conversely, the lender has a lien on the title until you pay off your mortgage.
The Role of the Mortgage Lien
A mortgage lien is a legal claim the lender has on your property until the loan is fully repaid. This lien is recorded on your property’s title until you complete the mortgage payments. If you default, the lender can take the property through foreclosure using this lien. However, the lien is not the same as owning the deed.
What Happens to the Deed After You Get a Mortgage?
When you close on your home, the deed is typically filed with the local county recorder’s office. As the buyer, you are listed as the owner on the deed, and this information is made public. However, the lender’s lien is also recorded as part of the public record. This process ensures that you are recognized as the legal owner, but it also shows the lender’s interest.
Does the Lender Have Ownership Rights?
The lender does not have ownership rights to your home. Instead, their rights are limited to the mortgage lien. This lien gives them the right to foreclose if you stop making payments, but it doesn’t make them the property owner. Once your loan is fully paid, the lender will release this lien, removing their claim from your property.
How Does Paying Off the Mortgage Affect the Deed?
When you pay off your mortgage, the lender releases the lien. This is often done by filing a “satisfaction of mortgage” document with the county. Once the lien is removed, the home is fully yours, free and clear, without any lender involvement. The deed remains in your name, and no further action is required to confirm your ownership.
Can You Sell the House If You Have a Mortgage?
Yes, you can sell your house even if you still have a mortgage. During the sale, the proceeds first go toward paying off the remaining loan balance. Once the mortgage is satisfied, any remaining money goes to you. The buyer then receives a new deed in their name, and you no longer have any claim to the property.
What If You Can’t Find the Physical Deed?
In most cases, you don’t need to worry if you can’t locate the physical deed. Deeds are recorded with the local government, which keeps official copies. You can request a copy from the county recorder’s office if needed. Today, many counties offer online access to these records, making it easier to retrieve a copy when necessary.
What If You Miss Payments on Your Mortgage?
If you miss payments, the lender may begin the foreclosure process. This means the lender can legally take possession of the home and sell it to recover the remaining loan balance. However, until foreclosure is completed, the deed remains in your name, even though you risk losing ownership due to nonpayment.
How Can You Protect Your Ownership Rights?
Maintaining your mortgage payments is the best way to protect your ownership rights. If you face financial challenges, contacting your lender for options, such as forbearance, can help prevent foreclosure. Staying proactive with your lender is key to keeping your ownership intact.
Common Misconceptions About Deeds and Mortgages
A good number of homeowners think that the deed is retained by the lender until the mortgage has been paid off. However, this isn’t accurate. The lender only has a charging order on the property, which means it is a right across the property in case of nonpayment. They do not have a legal right to the property or the physical deed to the property.
FAQs
- Who holds the deed when I have a mortgage?
You hold the deed, but the lender has a lien on the property as collateral for the loan. - What happens to the deed after I pay off my mortgage?
Once you pay off the mortgage, the lender releases the lien, and the property is fully yours. - Can I sell my house if I still have a mortgage?
Yes, you can sell the house. Part of the sale proceeds will go to pay off the remaining loan balance. - Does the lender own my home?
No, the lender only has a lien on the property. They don’t own it unless they foreclose due to nonpayment. - Where can I get a copy of my deed?
You can request a copy from your local county recorder’s office or access it online if available. - What’s the difference between a title and a deed?
The title represents ownership rights, while the deed is the document that shows who owns the property.
Final Thoughts
This is because interest rates for construction loans are always higher than those of the standard mortgage loans. This is because construction loans are considered risky than most other kinds of loans as the building is being constructed. Florida construction loans average between a 4% and 12% interest rate depending on your credit score, size of the loan, as well as the package and procedures of the lender. Further, construction loans are flexible with shorter maturity periods, which can be between six months and two years. As soon as construction is made, the loan can be refinanced to fixed rate which means that for future payments, interest rates shall not fluctuate.
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