Mortgage Dictionary -> Deed
There are many legal documents that are important when it comes to buying and owning a home, but one of the most important of these is the deed. Some homeowners are unsure of what sort of rights the deed to a home guarantees them, as well as what type of deed to choose, not to mention, what a deed is in the first place. You're going to learn all of these things in this article.
What is a Deed?
A deed is simply a legal document that contains information about who owns a particular piece of property. It contains both the previous owner's name and the current owner's name. When property is sold, the deed is the legal document that transfers the ownership of property from one person to another.
What Does a Deed Guarantee Me?
A deed guarantees you the right of ownership to the property. That means when you sign a deed for a piece of property, you assume all legal rights and obligations to the property. It's a lot like the certificate of title, except it's not always used in real estate transactions.
What Types of Deeds are There?
Quitclaim. The quitclaim deed is typically used when one homeowner decides to give up legal rights to the other homeowner-usually in the case of a divorce or break-up. While the quitclaim deed does relieve legal responsibilities for the property, it does not cancel any mortgage interest the quit claimer has in the property-so if you're on the mortgage, you still may have to pay it.
Grant Deed. The grant deed is a deed that transfers ownership and implies certain things, such as: the title hasn't already been transferred to another person, except as implicated in the deed. This type of deed isn't used all that often, but is useful in some scenarios.
Warranty Deed. The warranty deed is used when a homeowner owns the home free and clear, meaning, there are no other liens or claims on the property. The homeowner that has the home transferred to them is guaranteed by the deed to own the property and will not have to worry about dealing with lenders.