DIYbanter - View Single Post - OT -Need to file a private mortgage??

HeyBub[_3_]

hr(bob) wrote:
I am giving a relative a mortgage on their home as I can get a higher
interest rate and they can get a lower interest rate than either of us
could get using a regular bank. I will issue annual 1099 forms so
they can claim the interest on their taxes and I will declare the
interest on my income tax. We have all the papers drafted, etc, but
someone asked why we were bothering to plan to record the mortgage
with the county recorder.

I was surprised, I never even thought about why, just assumed that
everyone did record all mortgages. The only reason I can see for
recording the mortgage is to let any future prospective purchasers of
the property be aware of the fact the the owners do not have a
completely clear title to the property. What am I missing??

A morgtage isn't your only option. A Contract for Deed is another. If
everything goes right, it works the same way - at the end of the payment
period, the buyer owns the property. If there's some hiccup, title remains
with the seller. Even with a Contract for Deed, you should still record the
transaction with your registrar of deeds.

Talk to a real estate attorney. It'll be the best $200 you'll spend.