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gebernard1 · Joined: 09 Feb 2010 Posts: 1 1.41 Dollars($)

Hi,
My Father-In-Law has moved into a new residence. He has offered to us to take over his prior home. I understand a quit claim would make us the legal owners but he would still be on the loan. Would a refinance on our part be the appropriate next step to free him of any loan obligation? Being that this would be a 2nd home that we would likely rent out, how would that effect the interest rate? I learned that taking out a new loan for an investment property will require 25% down plus buyers and sellers closing costs. But if we did the quit claim and then refi we could reduce greatly our out of pocket costs. Is this true? Whats the best way to go? By the way we live in Ca. if that makes a difference.
Thanks for any info.
-John

savior70 · Posted: Tue Feb 09, 2010 3:49 am Post subject:

Hi gebernard,

If your father-in-law transfers the property to you through a quitclaim deed, you will get the ownership to the house. You can then refinance the property in your name and take over the responsibility of the mortgage payments.

If you're going to use the house as an investment property, you will have to pay high rate of interest on the new mortgage. You will also be required to make a considerable down payment towards the loan. However, the amount of down payment will depend on your lender and your credit scores and other factors.

gmakerley · Posted: Tue Feb 09, 2010 9:04 am Post subject:

without doubt, you'll find that the interest rates are higher on investment properties, and your borrowing will be limited by loan to value ratios that are substantially lower on investments as well. you didn't indicate if this is a single family dwelling or a multi-family...that will have an impact on the ltv, as will your credit scores.

i suggest you begin shopping around right now, prior to the quit claim, so that you can be certain of what you need to do and what you might be able to find in terms of loan types and rates, etc. you can certainly coordinate the deed with the mortgage, which is a lot smoother process for a lender as well.

Guest

Hi, thanks for your responses that helps a lot.

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can I refinance after a quit claim?