If dad wants to give me property and I take over the mortgag

tiffann1011 · Joined: 01 Feb 2008 Posts: 4 2.32 Dollars($)

My dad has property that I would like to eventually buy. If we did the quit claim deed would this be the best way to go, with me making the mortgage payments until I could eventually refinance it in my name? Would this show on my credit report? Is there another deed that you would recommend? I am also wondering if we do it this way will there be tax penalties, and will I be able to claim the tax deduction for the interest paid before I refinance? The other question is what is the cost to file a quit claim deed? Thank you in advance for any suggestions!

Guest 0.10 Dollars($)

Yes, you can go with a quitclaim and then refinance when possible. But your dad has to inform the lender about such a transfer. There may be terms and conditions in the mortgage such that upon any transfer of property, the lender may call the entire loan balance due.

tiffann1011 · Joined: 01 Feb 2008 Posts: 4 2.32 Dollars($)

He said he would go to the bank and talk to them. What suggestions do you have for this? Could he do a new loan for the balance with me on there? If we did not have to pay the balance due will it still show on the credit report just from the quit claim that I was paying a mortgage on time?

Thanks

tiffann1011 · Joined: 01 Feb 2008 Posts: 4 2.32 Dollars($)

Is there a different type of transfer deed that you would recommend that would be a better fit. I think the whole point is for me to take over the mortgage without going through the loan process at this time and doing it when it is a better situation. I know interest rates are low now though.

jerry

Hi Tiffann,

Welcome to the forums.

Until and unless, you have your name on the loan, the payments won't how on your credit report.

As for the deed, your dad can use a quitclaim deed as because the property already has a mortgage and it's a transfer between family members.

There won't be any tax penalty here. And, you won't be able to deduct the interest paid before you refinance. This is because to claim the deduction, you need to be on the property as well as the loan.

"what is the cost to file a quit claim deed"
The cost to file a quitclaim deed varies from one state to another, probably from one county to another. You need to check this out at the County Recorder's office.

Thanks,

Jerry

tiffann1011 · Joined: 01 Feb 2008 Posts: 4 2.32 Dollars($)

I really appreciate all of the help here! Is it difficult to be added on to the loan?

jerry

Yeah Tiffann, the main concern is to take over the loan. The quitclaim deed is the one to be used here, no doubt about that. Without a refinance, it isn't easy to take over a loan.

Lenders do agree at times for a simple transfer of loan such as novation iwthout you having to go through the loan process. But this is something which lenders raely go for. Most of the time, lenders prefer the refinance.

What I want to know is, are you having a problem in qualifying? I mean is your credit not ok or do you think you cannot afford a refinance right now? In that case, if your dad can use his credit to help you qualify, then he can be added to the loan simply as a cosigner. So, his responsibility will be to pay off the loan only in case you default. I think he should talk to the bank on this issue.

Thanks,

Jerry

Guest 0.10 Dollars($)

The refinance will be with my husband and myself. His credit is better than mine. We have no late payments in the last 10 years, no public records, etc. It is just the credit cards balance that has caused the problem. We did qualify at a point for a loan here in California but that was with 100% loan. Since then we have maxed the cards and that is absolutely having an impact on the score. His score is 633 so not great. Mine I am disputing reporting on it. Of course that loan was double the amount. With all the changes and the stricter guidelines for a loan we had come up with the quick claim idea. I just want to also be able to claim the tax. I have been on a leave from work due to illness and really don't know that I can go back to work. So, moving is sounding pretty good. The income taxes for the year of 2007 shows a good income for both of us, but I won't be working when we move. What do you think should we try refinance now or wait? It is just the purchase problem of it being our prime residence while he stays here working. Does that make sense?

helping_user

Hi,

If your husband's credit is fine, then he can be the cosigner. You need not add your father on the loan then. It’s good that there are no late payments on your behalf.

If the lender has no problem in your father quitclaiming the property, you can continue paying for it in case he can't. And then, when it's time for refinance, you and your husband can go for it. I'm saying this because you are currently disputing your credit report so if your score improves you can utilize it to get favorable terms on the loan.

However, you can get tax deduction when you are able to put your name on the loan. So, I suggest wait for some more time before you refinance. But again, a matter of concern is the rates and they are pretty good now.

Thanks.

0.10 Dollars($)

I will wait until my dad goes and talks to the bank that he has the loan with. I know he does a lot of business with them but I also know how strict loans are getting. Since we never "purchased" the property we can still refinance under our names since we are on the title? Would my dad be able to co-sign on the refinance for us if he wanted or would that just be pointless. His score is a little over 700.

Jessica

Hi,

You are correct. It is possible for you to refinance because you have your name on the title and it doesn't matter that you didn't purchase the house. Your dad will be able to cosign for you if his credit record is good. A 700 above score isn't bad at all. So, I think you are on the right track.

Regards,

Jessica

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