Real Estate Investor · Westminster, CO · Member since 2009 · 38 posts · 2 votes
With 16 pages on this, lots of unnecessary stuff. But line 144 what is the difference between "Due on Transfer-Strict" and "Due on Transfer-Creditworthy"? And as an investor which one is better for me?
Also line 57 it asks if Buyer will/will not provide a mortgagees title insurance policy. Since its a cash deal, do I just say 'will not' ??
Investor · Pawleys Island, SC · Member since 2008 · 1k+ posts · 837 votes
15y
Just guessing here. A local real estate agent should be able to clarify the distinction for you.
A transfer from the borrower to a new owner under the "Due On Transfer--Strict" deed of trust creates a default, unless the lender consents to the transfer. The lender has no obligation to consent to the transfer, regardless of the creditworthiness of the borrower.
The "Due on Transfer--Creditworthy Restriction" deed of trust requires the lender to accept a "creditworthy" buyer.
If this is a cash purchase with no lender involved, then the mortgagee title insurance clause is not applicable.
Additionally, since you are paying cash, and not assuming the buyer's loan nor taking the property subject to any existing financing, the deed restrictions you ask about would also seem to be not applicable.