Dear Mr. Gisriel: I am currently negotiating to buy a house. I've noticed that some mortgage lenders are advertising mortgages with "no points, no closing costs." How is this possible?
Is there something that needs to be put in my purchase contract that would qualify me for these mortgages?
Robert Price
Severna Park
Dear Mr. Price: Any mortgage lender can, and many do, offer a variation of the "no points, no closing costs" mortgage. Here's how it usually works:
The purchase contract with the seller of the house must first be negotiated so the seller will be paying all the transfer taxes, documentary stamps, and loan points, if any.
The other normal closing costs and fees are paid for by the lender -- which charges a slightly higher interest rate to make up for the closing costs.
This arrangement is used every day by many lenders to help meet the needs of both buyers and sellers.
Is the borrower getting something for nothing? No. In some cases, the borrower might even be paying more. These no-cost mortgages may not work for everyone, but they are available.
Dear Mr. Gisriel: Please settle an argument. If for some reason a homeowner delivers a fully signed and notarized deed to a house to me on Monday, but then delivers another fully signed and notarized deed to another man later that same week, perhaps on Thursday, but the Thursday deed is recorded in the land records before the Monday deed, who actually owns the house?
Brian Chasney
Baltimore
Dear Mr. Chasney: Under Maryland law, the properly executed and notarized deed that is recorded first in the county land records takes precedence over a deed that is dated and delivered earlier but is recorded later.
For the first recorded but later dated deed to take precedence over the earlier dated but later recorded deed, the first recorded deed must have been given to a "bona fide purchaser for value" -- who has no notice of the earlier dated and delivered deed.
Thus, the house in question would belong to the man who owns the Thursday deed because it was properly recorded first in the land records, as long as the owner of the Thursday deed had no notice of the Monday deed.
Of course, the holder of the Monday deed would have a valid cause of action against the seller of the house for fraud.
