Home Buying in Cleveland>Question Details

Trulia Curio…, Other/Just Looking in Cleveland, OH

When do you actually "own" a house you purchase?

Asked by Trulia Curious, Cleveland, OH Wed May 13, 2009

Apologies for the first time home buyer question. I am looking to buy a house with a 30% downpayment and a 30-year loan. Under this circumstance, do I own the home when the sale is closed and I become the title holder or does my bank hold the title and ownership until my loan is paid off? Thanks!

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Dear Trulia Curious,
You have gotten some good answers. I think if you want it to be 100% yours sooner, simply get a 15 year loan, or make double payments (if you can) and pay the loan off faster. This will save you time and money as you will save 15 years of interest payments. You just need to make sure your loan does not have a penalty for paying off the loan early. Good luck!
0 votes Thank Flag Link Mon May 24, 2010
Also some contracts are not for a closing/funding transfer; although in my experience most are. This could(probably would) prevent, temporarily, a transfer to a friend or relative. In your case, depending on your finances a 15 year note might indeed be preferable. Depends on how the higher payment would affect your budget and debt to income ratio. best of luck, curious.
0 votes Thank Flag Link Fri May 21, 2010
Be careful. This is a state-level decision. Check with the Ohio Association of Realtors ohiorealtors.org and take any answers from other states with a grain of salt.
Web Reference: http://www.ohiorealtors.org
0 votes Thank Flag Link Thu May 20, 2010
The simple answer is you cannot sell your house for less than you owe on it without the banks permission.

Think of it as a car that you got a loan on. If you owe chase $15k for your car and you want to get a new one, you need to sell it for at least that amount so you can pay off the loan. It's the same with houses basically. As long as the bank is getting it's money back they have no say in what you sell the house for.
0 votes Thank Flag Link Wed May 13, 2009
Thanks, Charlie for your reply!

That part I understand, but my question is whether it impacts my ability to sell, whether I need permission from the bank on any decision in such matter.

For example - if I want to sell the property later below market price (but still at a profit) to a "family" or "friend". Will I have that freedom or does the bank have any recourse in blocking something like that as long as the title is under the bank ?

Again, thanks in advance.
0 votes Thank Flag Link Wed May 13, 2009
You own the home when the deed in your name is recorded. The lender has a secured interest in the property meaning that you cannot convey a "clear" title until they have been satisfied. And, absent default, they cannot put the home up for sale. Only you can.
0 votes Thank Flag Link Wed May 13, 2009
How about decisions on selling the house during that period? I imagine I require their approval for such actions. Will they limit my ability to sell within a range I want to for example or when I can sell it?
0 votes Thank Flag Link Wed May 13, 2009
Thanks, Alan, you are fast my friend!

So, under this circumstance, there is a possibility for me to go with a 15-year loan instead.

Would you know the disavantages to having this title under the bank rather than myself? Am I limited on the decisions or actions I can take on this house during the period that the title belongs to the bank?

Again, many thanks!
0 votes Thank Flag Link Wed May 13, 2009
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