Paid-Off Mortgage

By Edith Lank

June 9, 2019 5 min read

Ms. Lank: Once we have paid off our mortgage, how long should we wait to get a clear deed? — K. F.

Answer: In a few states, you're looking for a reconveyance deed, but in most places, what you want is a certificate of satisfaction. Either way, it will prove your loan has been paid off in full (satisfied).

If the lender has put this new document on file in your county public records office, that's all you need. In some states, they're required to do so within 90 days of the payoff. Your public records office can tell you how to check.

Lender's Appraisal

Edith: In regards to the recent question from the reader about whether he or she was entitled to a copy of the appraisal: I purchased a home last year, and the lender supplied me with a copy of the appraisal without me asking. I've had seven mortgages on five homes in four states, and I don't recall ever getting a copy of the appraisal before.

The appraisal came in handy in getting my tax assessment reduced somewhat. — G. W.

Answer: See the next letter — sounds as if the law has been changed, probably not too long ago.

Free Copy

Dear Edith: There is no need for kicking and screaming in order to obtain a copy of your appraisal when applying for a mortgage. Federal law requires that the applicant receive a free copy. — D. M.

Seller Backing Out

Ms. Lank: My grandson made an offer on a house. It was accepted. He gave earnest money, was approved for a mortgage, paid for an appraisal and paid to have an inspection by a licensed inspector.

The seller now wants to cancel the deal.

Is this legal? What recourse does my grandson have? His attorney advised him to ask for the monies spent in a polite manner and hope the seller complies. — R. L.

Answer: It sounds as if your grandson had a binding contract to buy that house. If that's the case, the seller was legally bound to abide by it.

But it also sounds as if your grandson's willing to cancel the deal if he's reimbursed for the money he's already laid out. And — most important — he's getting legal guidance along the way.

You ask for my advice. I'd say stay out of this. Your grandson and his attorney know more about the situation, more about the law and more about that house than we do. We'd better just leave it to them.

Home Seller Tax Break

Dear Ms. Lank: We moved into our lake house in mid-July of 2018 as our primary residence and left it for the winter months on January 3, 2019. We resumed living in our lake house on May 1, 2019, and will be there until November 2019.

When can we sell our lake house and avoid capital gains tax? Is the two-year rule cumulative, or is it years calculated January to January? — J. M.

Answer: To take advantage of the home seller tax break, you must have owned and occupied the property as your principal residence for at least two of the five years before the sale. The occupancy need not be all consecutive. You could accumulate the required time every summer, for instance, as you're doing. But it needs to be your real primary residence. Where is your summer mail delivered, for instance?

You could sell and take advantage of the tax break as soon as your residence there adds up to 24 months. Assuming that's within a five-year period, your sale should qualify for a federal tax-free profit — for the two of you — of up to $500,000.

Life Estate

Ms. Lank: I am a recent widow, and I moved in with my daughter. She has a 19-year-old daughter who currently is not living with us but is her heir. My daughter is concerned that if she were to die, my granddaughter could sell the house without giving me time to find other accommodations.

I would be able to handle the expenses — mortgage, tax and insurance. Is there a way that I could remain here other than by her giving me a life estate? — T.

Answer: With a life estate, you'd be full owner, but your granddaughter would automatically become owner at your death. If you were to want to sell before that, she'd have to agree, and she'd be entitled to a large part of the proceeds, based on your life expectancy.

It sounds as if you folks have already consulted a lawyer, and that does seem like a sensible way to handle the matter.

Contact Edith Lank at, at [email protected] or at 240 Hemingway Drive, Rochester NY 14620.

Photo credit: glynn424 at Pixabay

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