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Frequently Asked Real Estate Questions

Posted on 09. Jul, 2009 by Rosellina Giardino in Real Estate

September 21, 2009

My wife and I own a townhouse in Edmonton, AB and the title for the property is in both our names (both of us are registered as owners of the property). We would like to change the title of our townhouse to my wife’s name only, so I will not be the owner of the house anymore.

I would also like to know upon completing the task above, will there be any problem changing the name on the mortgage which is also in both our names.

There is a clause in almost all mortgages that is called a “due on sale” clause. This means that if you transfer the property (even if you remove one person from the title) your mortgage becomes immediately due and payable. Your bank can decide to demand payment of the entire amount owing on your mortgage.

The bank registers a mortgage on your property as security for the loan they gave you. The loan they gave you was based on the credit of both you and your spouse. If you want to be removed from the mortgage, you need to contact your bank and get their consent. Once you have that then you can also transfer the title to your spouse’s name alone.

Hope this helps.

Rosellina

August 3, 2009

Hi Rosellina  – I am hoping to purchase a condo in the near future, and am looking for a lawyer to assist me in the process – I’m a first time home buyer and really have no clue :-)

Most first time buyers expect that there is lots for them to do but your realtor, bank and lawyer do most of the work.

Generally, you just need to:

  1. Let your realtor know the lawyer information and the realtor will send the lawyer a copy of your purchase agreement;
  2. Get all your financing in order and let your bank know your lawyer info and the bank will send your lawyer all the mortgage information;
  3. Make sure you have your downpayment funds easily available (cash RRPS, transfer funds etc). Your downpayment amount may be more than you expect because of various adjustments to the purchase price that are made on closing.  The legal fees are paid with your downpayment;
  4. Arrange for insurance on the property; and
  5. Arrange for utilities, moving stuff.

Hope this helps. Feel free to call me if you have any questions.

Rosellina


Hi Rosellina,

I have a question: if there is only one person on a mortgage, why can they be the only one on the land title?


The bank is lending you money.  They want to be protected in the event you do not pay the loan. So, they get you to sign a mortgage agreement which gives them an interest in your property and which gets registered on your title.  Each of the owners of the property must agree to the mortgage agreement since each of their interests are affected.
The Alberta Land Titles Office will not register a Mortgage that does not match the names on title.
So if there are 2 people on title, you both have to enter into a mortgage agreement with the bank.
Some people try to get around this by transfering the title to both names after the mortgage is already registered.  For example, after your purchase is complete (i.e. the property is transferred to you and the mortgage is registered), you would transfer the property into both your names. This is a breach of the terms of your mortgage.  If you do this your mortgage becomes due and payable (i.e. the bank can make you repay the entire loan amount).
Hope this helps, let me know if you have anymore questions.
Rosellina

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