When you are in the process of completing all the documentation required for the closing of your new property or for the refinancing of it, sometimes your bank representative or the attorneys working on the case may ask you for some documents or ask you questions that you may not understand what they refer to. Here we explain some concepts and clarify your doubts. It is important that, if you understand that any of these concepts apply to you, talk to your mortgage officer so that he or she can guide you on the steps to follow.
What can I do as a buyer or as a homeowner who is refinancing a property to make sure there is no problem with my property registration?
The chain of transmission of property from one owner to the other must be made official before the Property Registry. Only people registered as owners can carry out a mortgage transaction secured with said property. The bank will validate that information as part of the mortgage loan processing. The best way to ensure that the property is properly registered in the name of the person presenting to the bank as the owner of the property is to do a Title Study. If you are buying or refinancing, the bank is responsible for requesting the title study. There are several companies in Puerto Rico that are dedicated to carrying out this study.
If the registration is incomplete or incorrect, the tract must be reestablished in order to complete the mortgage transaction. To reestablish it you will need the services of lawyers specialized in the matter.
When do they deliver the refinancing deed to me?
The refinancing deed is sent to the client by email, between 5 to 10 days after closing.
When do I get checks for the money left over from the refinancing?
Many people refinance their property to pay off debts or do some type of construction or remodeling on their property, therefore, there will be money left over after paying the original mortgage, as long as the value of the property exceeds the amount owed on the original mortgage. Because a mortgage involves a lien on the property as collateral to the financial institution that offers the mortgage loan, in the event that the property is the client’s main residence, there is the right of rescission, in which 3 days to the customer to consider whether or not they want to continue with the transaction. If the client decides to continue, the check(s) will be delivered to the client after that period has passed.
The client will be given a form on the day of closing, where they will accept or withdraw from the loan. Once the client returns the signed form with his approval, the bank will coordinate with the client to deliver the check or checks.
What happens if the owner of the property I am purchasing passes away?
In order to sell a property, the owner must be alive or the heirs must be registered as owners at the time of sale.
In order to sell, the heirs must have a will or a declaration of heirs and the will process must have been carried out.
If you have any questions regarding this, you can contact your mortgage officer to guide you and clarify any information.
We also recommend that you make sure that all heirs agree to the sale of the property and are available for signing on the day of closing. If they are not available for signature, they must be represented through a power of attorney.
What is a power of attorney?
A power of attorney is a legal document that allows another person to act on your behalf. If one of the parties is not going to be present at the time of closing, that designated person will act for you or the seller (as the case may be) in all notarial or banking procedures. It is important that the power of attorney indicates that the person who will be carrying out the transaction can carry out the type of transaction that he will be making.
If the seller or buyer will not be able to appear at the closing because they do not live in Puerto Rico, are ill, or any other reason, it is important to inform in advance and have the power of attorney certified at the time of closing.
As soon as the person who is not going to appear has their power of attorney, they should send it to the bank for the bank’s legal representation to verify, especially if the person processed the power of attorney in the United States. Sometimes it is required that a power of attorney issued in the United States be legally authenticated in Puerto Rico. If at the beginning the person has a simple copy, this can be sent, but for the closing a certified power of attorney must be delivered.
What happens if the property I am purchasing is owned by a divorced couple?
If a divorced couple is selling a property, both parties must agree to the sale. In addition, you must ask the couple for the divorce decree and the stipulations or agreements reached in the divorce process. These documents must be certified by the Court. It is also important to check if there are clauses that protect minors.
If the property you are purchasing is owned by a divorced couple, we urge you to notify the bank immediately, so that they can request all the necessary information in time.
If I am divorced from my partner and I am going to refinance, what should I do?
It is the same situation as the previous question. You must submit a court-certified copy of your divorce decree along with the agreements reached. You must inform the bank as soon as possible. The bank will evaluate whether the person who is refinancing has the capacity to make the payments on the new Mortgage. If this is not possible, the client could obtain a co-signer whose income will be considered in the loan qualification.
If I have a settlement with my partner, should I inform the bank?
If you and your partner have a settlement, it is extremely important that you notify the bank quickly, since not reporting it in time can delay the closing process.
To carry out the closing, you must deliver certified capitulations, however, at the beginning, you can send a simple, uncertified copy, so that the lawyers can analyze the case and be clear about what the couple’s property division agreement is like. .
What is a lien and how does this affect the property I am purchasing?
A lien is a charge, tax or tribute on real property. It is usually because the owner(s) owes a debt that the creditor hopes to collect with the proceeds of the property’s value. In order to buy a property it must be free of liens.
Liens are registered in the Property Registry and can be federal, state or CRIM.
If the property you are purchasing has any liens, the owner must obtain the official lien document in order to cancel and submit to the registry along with the other documents of the new mortgage.
Why do you have to do all these procedures before buying a property?
In Puerto Rico, unlike the United States, all legal issues must be resolved before closing. In Puerto Rico, the property must pass to the new owner free of liens.
For more information or to start your mortgage process, visit orientalbank.com.
