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fhgcompany · Joined: 07 Jul 2007 Posts: 1 1.79 Dollars($)

My mother co-owns property in North carolina with two other family members. She owns 70% and they own 30%. The property is free and clear of any mortgages or liens. She wants to buy them
out, but every time she attempts to get a mortgage to pay them off, she gets turned down due to her low credit scores. We were thinking of quit claiming a deed to my 19 year old daughter since she is the only one in the family with good credit. We would then have her get a mortgage and quit claim it back to my mother, but how can we get that mortgage back into my mother's name?

Niicss · Posted: Sat Jul 07, 2007 5:02 pm Post subject:

Fhgcompany, what you have thought would work out as your daughter has good credit but to transfer the mortgage back into your mother's name the mortgage will have to be refinanced. Another way it can be possible is when the mortgage has an assumable clause.

The difference between refinance and assumption is that in assumption the terms of the mortgage remain the same and your mother will be taking over the payment responsibility. While in refinance the terms will not remain same and can change as per the market conditions at the time of refinance and her credit will be checked at that time.

miller_st · Joined: 17 Jan 2007 Posts: 918 168.95 Dollars($)

If after taking the mortgage she quit claims it back to your mother the mortgage will have to be refinanced or if the mortgage will contain an assumption clause then your mother will be able to assume the mortgage as Niicss mentioned.

So at the time of taking the mortgage you will have to inquire with the lender if the mortgage would have an assumption clause or not. If the mortgage would not have assumption clause then refinance will be the only option to transfer the mortgage back into your mother's name.

At that time lender would check her credit as well as income and debt to income ratio as is done when the mortgage is taken for the first time. And it is possible that lender may not agree to refinance the loan because of your mother's bad credit or ask for higher rates than normal.

If you can get a mortgage with an assumption clause then it would be much better.

Miller

Guest

Miller--

colin · Posted: Sat Jul 07, 2007 6:00 pm Post subject:

Guest

The question is will your daughter be able to qualify for mortgage at this age. What income she is earning. Lender would look at her income also apart from credit.

Based on income they will decide if she can afford the payments or not.

Posted: Mon Jul 09, 2007 12:17 am Post subject:

To continue from where I left off. My mother has a low credit score, fixed (low) income, only bad hospital debt listed on her credit file. Her home is paid for. It is worth $70,000. But, again, she want's to buy out the other owners (her extended family). She owns 70% and they own 30%. I wanted to have her quit claim it to me, but I have the same problem. My credit score is low and I have more bad hospital debt, than good debt. I tried to purchase it, but was turned down by ten different mortgage companies over a course of one year. The only person we can think of is my 19 year old daughter. She only makes $10,000 a year, though and she basically has no credit. I wonder can we do this? All we want is to buy these people out. We have no money. I just want my mom to quit claim this property to my daughter, then hopefully have her get a mortgage on it and have my mom assume the mortgage and have it quit claimed back to her. I wish I could have it quit claimed to me, but we will run into the same problem with getting approved for refinancing.

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi Fhgcompany,

In your first post, you have mentioned that your 19 years old daughter has a good credit. Later, in the next post you have written that she has no credit. Do you mean that she has no payments due on her any debt? And if your daughter takes the loan also, she cannot transfer it later to her grandmother as loan transfer is not possible through a quitclaim deed. It will remain with your daughter to pay it off. And even if she goes for a novation, the lender will deny because of her grandmother's low credit score. So, it will be better if your mother waits for some time and improve her credit score to qualify herself for the loan and purchase the other shares of property later.

Guest

I too feel it would be better to wait for some more time. At this time your plan might face problems as getting is assumable mortgage can also be difficult. If you don't get then transferring it back in your mother's name will be difficult.

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