DEAR BOB: You have said several times the way to convey title to real estate into a living trust is by a quitclaim deed signed and notarized by the owner. That’s what we did. But now we want to sell our house, which is in our living trust. How do we do that? –Janet Y.
DEAR JANET: That’s easy. Presuming you are the trustee of your own revocable living trust, you simply sign the deed as trustee.
Purchase Bob Bruss reports online.
For example, you would sign the deed “Janet Y., trustee.” However, before doing so, check with the title company that will be insuring the title for your buyer. It might be necessary to produce a copy of your living trust for the title insurer.
HOW TO USE A REVERSE MORTGAGE TO BUY A RETIREMENT HOME
DEAR BOB: As I recall, about a year ago you wrote about reverse mortgages. I think you said a reverse mortgage can be used to buy a retirement home. How does that work so there are no monthly payments? –John R.
DEAR JOHN: The only reverse mortgages for home purchase are available from Fannie Mae. The other two reverse-mortgage lenders, Financial Freedom Plan and FHA (HECM), do not offer these mortgages to buy a retirement home.
For details, please consult a reverse-mortgage originator offering Fannie Mae reverse mortgages. As a general rule, you will need to make a cash down payment of about 50 percent of the home’s purchase price. Of course, you must be 62 or older. To find a local Fannie Mae reverse-mortgage originator, go to www.ReverseMortgage.org.
MORTGAGE LENDER DOESN’T HAVE TO CANCEL P.M.I. AFTER A YEAR
DEAR BOB: We refinanced our home loan in 2005 for 90 percent of its market value. As a result, we had to pay PMI (private mortgage insurance) of about $193 per month. The mortgage broker told me that when we have 20 percent equity we can cancel the PMI. We did some major remodeling and a room addition. Now we have about 25 percent equity and the PMI is a total waste of money. But the mortgage company refuses to cancel our PMI because our loan isn’t 24 months old. Is this legal? –Todd W.
DEAR TODD: Yes. If your mortgage was sold in the secondary mortgage market to Fannie Mae or Freddie Mac, their guidelines allow PMI cancellation after 24 months of on-time monthly payments if your equity exceeds 20 percent. You obviously don’t yet meet the 24-month test, so just be patient.
The new Robert Bruss special report, “The 20 Essential Questions Smart Home Buyers Must Ask to Avoid Overpaying in a Buyer’s Market,” is now available for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet delivery at www.BobBruss.com. Questions for this column are welcome at either address.
(For more information on Bob Bruss publications, visit his
Real Estate Center).