Explanation for the Texas Deed of Trust Questions from the Loan tab:
Select if this transaction is: (1) a Purchase Money Mortgage and the borrower is not the owner of the property before this loan, and you wish to add GoDocs' standard Texas Vender Lien language, (2) a Refinance/Extension when the borrower owns the property prior to the loan (regardless of lien priority of this loan) and you wish to renew, extend, and/or carry forward an existing Texas Vendor Lien, or (3) when it is not a purchase money loan:
In terms of the Renewal and Extension section for a Texas Deed of Trust our DoT contains a provision entitled "Renewal and Extension." In working with our local TX counsel, GoDocs inserts this provision in our DOT whenever a loan is a refinance of existing debt.
As it pertains to the section entitled "Renewal and Extension." do note that this is standard language. By paying off these existing debts, you (new lender) are “stepping into the shoes” of the prior lender, also known as equitable subrogation. Under Texas law, paying off the prior debts allows you (new lender) to assume the lien priority that the prior lender had when it made the loans; no intervening liens since the date of each loan can trump your lien priority. If the liens were extinguished at payoff, new lender would not get that benefit; its lien priority would date from today. Instead, you as the new lender are “renewing and extending” (continuing) the liens (and their priority). When our local Texas counsel reviews each deal, he will finalize this passage for you. Also, please note TX counsel will upload their reviewed package on the files page.