selling a home thru refinancing

isasenarine · Joined: 04 Apr 2006 Posts: 1 0.07 Dollars($)

Can a seller sells his/her home via refinancing to his/her son and his wife?

Samantha · Posted: Tue Apr 04, 2006 12:43 pm Post subject:

Hi Isasenarine,

Welcome to MortgageFit Forums.

I think you want to pass both the title ownership on your house and the mortgage to your son. This can be done through a quitclaim deed and refinancing the mortgage in your son's name.

Now you must understand that the two are different procedures. Through a quit claim deed you can transfer the ownership interests to your son. It won't help you in transferring the mortgage.

To transfer the mortgage it needs to be refinanced in your son's name. You need to inform your lender before the property transfer as any such transfer makes the mortgage immediately due.

Also, do involve an attorney in the process to have a smooth and easy transfer.

Feel free to ask if you have any more queries.

God bless you.

For MortgageFit,
Samantha

Bill · Posted: Wed Apr 05, 2006 7:43 am Post subject:

Isasenarine,

No. As mentioned by Samantha, you can give your son ownership interest in the property by Quit Claiming him onto the title – however, any existing mortgage that was taken in your name will remain solely in your name and your responsibility.

Without more information I do not have a clear understanding of exactly why you simply don’t sell the property directly to your son. If you are attempting to sell the property below market value to your son you can do this as long as the new purchase mortgage successfully pays-off any existing mortgages.

If you are attempting to convey ownership to your son while at the same time pulling some cash-out for home improvement or debt consolidation - you may be aware that purchase mortgage financing is based on the purchase price … pretty much eliminating the immediate ability to pull cash-out during this type of transaction. Assuming this may be the goal, you can sell your home below market value to your son as a conventional purchase transaction and your son can refinance his mortgage at approximately 6 months based on the full appraised value of the home … possibly taking cash-out at that time.

If your son does not immediately qualify for a mortgage, you can sell him the property on Contract and use the Quit Claim process to give your son immediate ownership interest. With 12 months of on-time/documented (ie: canceled check) payments from your son based on the Contract Sale, your son should be able to refinance the home based on the appraised value (as opposed to the purchase price).

Just ensure you hire a reputable real estate attorney for any sale process and be sure you record any Contract Sale & Quit Claim. Also, you should have a reputable mortgage broker pre-view the entire situation to ensure your son will qualify for financing now –or- within the 12 months based on credit, debt-to-income ratios, etc.

Best of Luck!

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