How to Finance/transfer a house that we have been paying for

megan_wallace · Joined: 17 Aug 2007 Posts: 1 1.79 Dollars($)

My boyfriend and I live in a house that is owned by his parents. We pay the mortgage evey month by checking account, directly to the mortgage company. We have been doing this for 5 years now. We are now ready to get the house into our own names. But, a little holdup, we have a BK that is 2 years old. Our credit scores are still ok (I think) at 635 & 620. The outstanding mortgage is 121,000. And houses comparable in neighboorhood are selling for 200,000. So there is alot of equity in the house. What is the 1st thing that we need to do,to make this happen?? I have read up on quickclaim's and gifting, and that doesnt seem like the thing to do for us. We want the house completley, getting credit for the mortgage payment we make every month.
What to do?? Thank you.

evolovik26 · Posted: Fri Aug 17, 2007 10:50 am Post subject:

if you and your boyfriends parents are in agreement you can simply buy a home from them for a price you agree on. Depending on the situation several things can be done to get it in your guys name. Are you or the parents going to want to keep the equity in the home? Or will you split it somehow? Do you have a downpayment? Can your boyfriends parents gift you the downpayment and then collect from the equity? Are they willing to do a gift of equity? Is this going to be a full income documentation loan?
It can be as simple as them quitclaiming you on the title of the home and then you can refinance the home in your names when you show that you are the one that pays the mortgage. Perhaps a contract for deed can be looked at. There many ways to go about it. I would need to know more in order to give you more advice.

miller_st · Joined: 17 Jan 2007 Posts: 917 168.84 Dollars($)

carnahandavid · Joined: 21 Dec 2006 Posts: 239 58.41 Dollars($)

"But, a little holdup, we have a BK that is 2 years old. Our credit scores are still ok (I think) at 635 & 620."

First you need to check with lender on whether you'd be able to qualify for refinance now or not. What rate they are asking because of the BK you had and whether it is substantially higher than present refinance rates.

larry · Joined: 27 Jun 2007 Posts: 3328 473.51 Dollars($)

Hi Megan,

You said that the house is still in the name of your boyfriend's parents and you together with your boyfriend have been making the mortgage payments for the past 5 years. As the lender generally wants the title owner and the loan bearer to be in the name of one person, then didn't the lender asked his parents to refinance the loan in these 5 years?

Now when you are ready to get the house in your name, you can do it by using a quitclaim deed. In the deed, your boyfriend's parents will sign as the grantor and you will be named as the grantee. And thus will be getting the ownership rights to the property title. But on transferring the house, his parents may have to pay the applicable gift tax if the value of property transferred is more than $12,000 and if they do not qualify for the lifetime gift tax exemption.

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