Selling or purchasing a home can be a stressful and exciting time. There are several tasks you must remember and several documents you must sign in order to ensure that everything goes smoothly. This is why it is important to make sure that you properly execute the right documents. One such document you must have is the deed. The deed transfers the title of the property to or from you. There are four commonly seen deed categories: Quit Claim, Warranty, Special Warranty, and In Trust Deeds. When buying or selling real estate, it is important to understand the differences in each type of deed. Here is what you should know.

Quit Claim Deeds

A Quit Claim Deed does as it sounds: it renounces one’s interest in a piece of property. The individual who acquires the property through a Quit Claim Deed does not promise that the property will be free of third-party interests, such as liens. A Quit Claim Deed also fails to provide any warranties as to the property or nuisances within the property. Put simply, with a Quit Claim Deed clear title of the property is not promised.

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Many families in the United States face the threat of foreclosure due to financial difficulties related to the COVID-19 pandemic. Fortunately, most of these families have been able to avoid losing their homes thanks to the moratorium on foreclosures that was put in place in March of 2020. This moratorium has been extended several times, and while it was scheduled to expire on June 30, 2021, it has been extended once again. Homeowners may be able to make use of provisions that will allow them to maintain ownership of their homes.

Foreclosure Relief for Federally-Backed Mortgages

The federal foreclosure moratorium has been extended through July 31, 2021. This moratorium applies to homes financed through USDA Single-Family Housing Direct and Guaranteed loans, as well as single-family mortgages backed by Fannie Mae and Freddie Mac.

In addition to this extension, the Consumer Financial Protection Bureau (CFPB) has implemented a new rule that will provide protections for homeowners facing foreclosure while also offering options for financial relief that will allow them to resume mortgage payments and continue owning their homes. This rule will go into effect on August 31, 2021, and it will last until January 1, 2022. This will ensure that homeowners will have protections during foreclosure proceedings that take place after a borrower is delinquent on mortgage payments by at least 120 days.

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During a residential real estate transaction, all encumbrances on the title of the property will need to be resolved before the transaction can be completed. These encumbrances may include liens by creditors seeking repayment from the homeowner, such as mechanic’s liens. Those planning to sell their home will need to determine how to address any mechanic’s liens and resolve these issues to ensure that they can complete the sale successfully.

What Is a Mechanic’s Lien?

A mechanic’s lien allows a contractor or supplier who performed repairs or made improvements to a home to collect payment for any unpaid work. While homeowners will usually be able to resolve any payment issues with a general contractor, subcontractors or suppliers who were not paid by the primary contractor may also use mechanic’s liens to collect the payments they are owed. 

Requirements for Mechanic’s Liens in Illinois

Illinois law requires subcontractors or suppliers contributing to work on a single-family home to provide a preliminary notice to the homeowner within 60 days after work on the property has begun. This notice is necessary to establish the right to pursue a mechanic’s lien if payment is not received. A Notice of Intent to Lien must also be filed within 90 days after labor was last performed by a subcontractor or materials were furnished by a supplier. 

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For many people and families, homeownership is an important goal. Owning your own home not only ensures that you and your family will have a place to live and call your own, but it is also a good investment that can provide you with a number of financial benefits. However, if you are planning to buy a home, you will want to be aware of some mistakes that could affect your ability to obtain a mortgage or make a good offer on a property. These include:

• Failing to get preapproval for a mortgage - The first step to buying a home often involves understanding what you can afford. By looking at your income and expenses, you can determine an amount that you will be able to put toward a mortgage each month. With this information, you then work with a bank or other mortgage lender to get preapproval for a loan of a certain amount. With this preapproval, you will be able to make an offer once you have found the home you want to buy, and this will show a seller that you will be able to pay the amount offered.
• Not saving for a down payment - Being able to put down a certain amount of the home’s purchase price at the time of the sale will provide you with equity in your new home, and it will lower the total amount owed, resulting in lower monthly payments. It is often a good idea to take some extra time to save up for a down payment before proceeding with buying a home. You may also be able to receive assistance with your down payment through federal or state programs.
• Harming your credit score - As you prepare to sign the paperwork for your home loan, any major changes to your finances could affect this process. You will want to avoid doing anything that could result in a lower credit score, such as missing payments on any bills, canceling credit cards, or taking out a new loan for a car or appliance.  
• Failing to consider costs and expenses - You will want to make sure you understand all of the closing costs you will be required to pay when buying a new home. You will also need to obtain homeowner’s insurance, and you will need to be prepared to pay property taxes. You may also want to consider the costs of utilities at your new home, including electricity, water, sewer, gas, phone and internet service, and garbage disposal, as well as homeowner’s association fees, landscaping, and any other ongoing expenses.

Contact Our Gurnee Real Estate Attorneys

When buying a home, you will not only need to consider multiple types of financial issues, but you will need to address any legal matters related to the transaction. At Newland & Newland, LLP, we can provide you with representation, ensuring that your rights will be protected at all times. To get the legal help you need, contact our North Chicago real estate lawyers at 847-549-0000 and set up your free consultation today.

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There are many reasons why a family may struggle financially, especially since the onset of the COVID-19 pandemic in 2020. If you are having difficulty making mortgage payments, and you do not expect this to change in the near future, you will likely worry about your ability to keep your home. If you default on your mortgage by missing one or more payments, your lender may begin the foreclosure process. Fortunately, you have options, including seeking a new loan to refinance your home. It is best to take action as soon as possible, because once your lender initiates foreclosure proceedings, addressing these issues will become more complicated and costly.

Options for Refinancing

Refinancing differs from other types of loan modifications. When you refinance your home, you will be obtaining a loan that will pay off the balance on your current mortgage. Since this is a completely new loan, you will be required to pay closing costs and fees, and you will need to show that you have a steady income. You will most likely also need to own some equity in your home.

Since you will need to meet a variety of requirements to qualify for a new loan, it is important to begin the refinancing process before defaulting on your current mortgage. Missed payments are reported to credit bureaus, and this will lower your credit score, which will make it less likely that a lender will approve your loan.

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