Give house to the son if he pays the mortgage

bayl778

Just wondering. I have a friend that is planning to move out of his house and give it to his Son and the Son will pay what's left on the mortgage which is probably equal to the house value with the current depressed market. So the son gets the house for payment of the mortgage and the father gets out with out selling on the market.
Is this straight forward change the deed and names on the mortgage or is it more complicated?

shilowar

Uh no...the Son will most likely have to get his own Mortgage.


The Deed will have to be changed over at the Courthouse, and before that can happen the Bank holding the mortgage has to release the Lien on the deed.

yoshmyster

Slide him on the "Quit Deed" both people would be on the note just in case pops needs to step in.

River Rat

If he wants to just pay the mortgage, not assume it -- and truly wants the house -- I think his name can simply be added to the deed. But the mortgage may have language that requires notification if that is done. I'd talk to the mortgage company, and ask them.

nmyers

As long as he plans to stay young & healthy, he won't have to worry about the Medicaid spend-down.........

And, there is always capital gains to think about.....

Maybe, it's best to pay an elder-law attorney to look at all angles.....

Neal

JnRockwall

the only way they can make it that easy is to make a lease agreement that says the son is renting to own. that would be the best way to do it and stay legal.

With interest rates as low as they are, and the house is worth what is owed, he might be able to get his own loan and it benefit his credit. I would think this is the smartest way to go for both of them.

bayl778

For the Son to have full ownership he will have to qualify for his own mortgage? Can't just assume the current mortgage? Maybe if The father co-signs they can keep the current mortgage? Clearly needs legal advise.

Spider7115

Dad can sign a "Quitclaim Deed" over to the son but, if he does, the bank could demand payoff on the mortgage unless they agree to add the son as a co-signer.

A real estate attorney should give a free consultation.

select-fire

Life estate for the son is off the table. Dad would have to live in home.

First thing I would do is have the home appraised. That will tell if bank will loan the normal 80% on it. If it qualifies, then the lender will see if the purchaser will qualify.

If they don't qualify then someone else has to cosign. OR the Dad can keep the property in his name , let the son live there to make payments. Son will lose mortgage exemption on taxes unless Dad writes up a purchase agreement. Dad can sell the home to him as long as payments are made. IF son defaults.. then it is a family matter. Mortgage can stay in Dad's name as long as son/dad agreement states it is son's once home is paid for.

n/a

How about a Contract for deed.. Then the responsability still lies with the original homeowner.. Sort of Like a buy here pay here car lot. They hold the title untill it is payed......I bought a house 30 years ago on a contract for deed...I paid the owner and he paid the mortgage company..

bhale187

Mortgage Assumption, owner has to talk to the lender, but if the bank agrees they just slide ownership to the son along with payments due.

Just about every mortgage will have a 'due on sale' clause so the bank has to allow the assumption, and that will likely mean all the same steps of actually buying the house i.e. credit/employment checks, etc. The big benefit is no down payment.

bigoutside

quote:Originally posted by bayl778
Just wondering. I have a friend that is planning to move out of his house and give it to his Son and the Son will pay what's left on the mortgage which is probably equal to the house value with the current depressed market. So the son gets the house for payment of the mortgage and the father gets out with out selling on the market.
Is this straight forward change the deed and names on the mortgage or is it more complicated?


It could be as easy as that. Or far more complicated.

Dad and son are on great terms, no one else in the picture on the estate. i.e. no other kids and mom is gone. yes, it might work. or not.

With the information provided so far, the elder attny is the best answer.

remingtonoaks

If dad has put or will put the house into a living trust, then yes he can, he just needs to make the son the executor of the trust... There will not be any transfer of loan or title... As an executor of a living trust you have full control over said property(s) that the living trust owns... Most living trusts are made to "beat" the government out of inheritance taxes. But one can be set up for the reason you described... The cost of setting one up is based on the amount and value of the property(s) in it, but is far less to set up than paying Inheritance taxes and will be less than title searches, transfer fees, and loan fees

Now there are two types of living trusts, one is revocable, in which you can sell give or do anything you want to do with the property, but has to be included in a bankruptcy that the executor is involved in, the second one is irrevocable, with offer the same features, but can not be attached by a bankruptcy,

spasmcreek

is the son honorable, dependable, and reliable to follow thru or does pops stand a chance of losing it all...then legal advice & terms

roswellnative

The issue is that the mortgage is in the fathers name.

The best thing would be for the father to write a lease purchase.

Basically the son pays the $ to the bank and then in a predetermined time. 5-15 yrs buys it at a price set by the balance of the loan at that time.

If there is a title change the bank can call the note...

slumlord44

There is more than one way to accomplish what they want to do but state laws varry. I would spend a couple of hundred dollars on a good realestate attorny to make sure everything is legal and they get the end result they desire without anyone gettins the short end.