Q: in a special warranty deed, why would they add that a mortgage encumbers the property in it?
I am transferring half of my house to my daughter since I moved out to get assisted living. On the special warranty deed she sent me to sign, there is this sentence: "This is not "homestead" real property of Grantor, and Grantor confirms this is a conveyance which is not pursuant to a sale and a mortgage encumbers the property in the amount of $250,000 and, therefore, appropriate documentary stamps are affixed hereto." What does that mean?
A: The annotation of the mortgage is a stated exception to an otherwise clear title, but all other encumbrances are warranted against. That is proper, but apparently being a special warranty deed some of the normal four covenants of title are not made in that instrument.
Barbara Billiot Stage agrees with this answer
A: It means you no longer have homestead exemption on the property since you do not live there and there is a $250,000 mortgage on the property.
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