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Kathryn Lovell, Broker, CDPE, SFR, e-PRO
RE/MAX Preferred Properties, Inc.

953 Dolly Parton Parkway, Sevierville, TN 37962
Direct 865-740-4877
Office 865-392-5885
 Fax   888-901-4030
Each office independently owned and operated
TN License-315211

Thank you for visiting today. If this is your first visit, take your time and look around. I have plenty of information and resources available to you. If you are a return visitor, thank you. I would love to hear from you and tell you how I can serve all your real estate needs.

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Creative Financing

Creative financing: You’ve heard of it, and, as a seller, the idea sounds pretty attractive. But, do you know everything you need to know about carrying back a second; essentially, about becoming a lender? You better know the same things that financial institutions know - you better know about lender’s title insurance.

It’s time to sell your $150,000 home, a home that you have owned for fifteen years, a home in which you have substantial equity. The loan terms call for a $20,000 down payment from your buyer, a new $100,000 loan from a local savings and loan, and for you, the seller, to carry back a note for the remaining $30,000.

Will you, the seller, need title insurance?

Yes, you will. Everyone who retains an interest in the property needs title insurance. When you took on the role of lender, you retained a record title interest which you will want to protect for the term of the loan.

But, why would you need lender’s title insurance when the repayment of your loan is assured by a lien in the form of a recorded deed of trust against the property? What could possibly go wrong?

You must insure yourself for the same reason that financial institutions obtain title insurance - for the protection of your investment. You must be assured that your lien on the property cannot be defeated by a prior lien or other interest in the property, which, if exercised, would wipe out your security.

Anything that involves the new buyer’s ownership rights to the property is of direct interest to you because you are holding the second mortgage. If such ownership rights are in question or defective, you may have trouble collecting your monthly mortgage payments. But, you say, there is nothing in your property’s history that could cause problems: no problems with easements, no problems with boundaries, no problems with rights-of-way.

Contrary to what may be popular belief, these matters are not the only source of title problems; a large proportion of title problems arise out of man’s interaction with man. The fact of a marriage, a divorce, a death, a forgery, a judgment for money damages, a failure to pay state or federal taxes - these occurrences can and usually will affect your rights as a mortgage lender.

As an example of what can befall the lender, did you know that a federal tax lien recorded against your buyer before the loan transaction is concluded may result in the loss of security in your home? Sophisticated mortgage lenders are aware of this possibility as well as many others which could jeopardize their loan security and seek the protection afforded by a lender’s title insurance policy.

If you are considering carrying back a second, be sure to get all the facts regarding the benefits of lender’s title insurance. Your local title insurance company should be happy to provide the information you need.

Article by CLTA

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Testimonials

Kathryn actually sold 2 homes for us. She is WONDERFUL. Had other agents on both houses before who just didn't do much but when Kathryn listed the houses, both (2 years apart) were sold within a month. She knows how to promote and is always there for you for questions and issues. I would highly, highly recommend her if you want to get your house sold! Darleen
Thanks for all your help in making our "dream home" a reality. We really appreciated that you went the extra mile to get us the best price for our home. You are truly a professional. Carson and Judy Blake
Kathryn Lovell is truly a phenomenal real estate agent and the epitome of professionalism. She is knowledgeable, experienced, communicative and has a strong internet presence. Everything we were looking for in an agent. She went above and beyond to make sure our cabin sold fast and flawlessly. Angie Underwood
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