quit claim deed

Guest

We have purchased a home for our son with a 1031 exchange. He will pay the taxes and insurance and we will receive rent from him. AFter two years we would like to be able to put the property in his name but retain being his financial on the property. Can we just sign a quit claim deed to change it to his name and not have to go through a title company and pay the closing cost again?

larry · Joined: 27 Jun 2007 Posts: 3328 474.49 Dollars($)

Hi Guest.

Welcome to the forum.

You can quitclaim the property to your son by using a quitclaim deed but is it a mortgaged property? If it is a mortgaged property then you will need to take confirmation from the lender before quitclaiming the property to your son and the lender may ask your son to refinance the mortgage on his name only as he will be the owner of the property after you quitclaim to him.

Feel free to ask if you have any further questions.

Best of luck,
Larry

Guest

Thank you for your reply, Larry. We are the mortgage holder. In other words we bought the property with our 1031 cash. We will retain the mortgage and our son will pay us, but will the quit claim deed let it be in his name and now count as his house?
Thanks, Virginia

Jeanette · Posted: Sat Jun 07, 2008 8:34 am Post subject:

Hello Virginia

A 1031 Exchange is a "like kind" exchange that is recognized by the IRS. Thus you must relinquish one property for the exchange of another that is identical. This become tax deferred if the 1031 exchange rule is followed. The foundation of 1031 exchange rule by the IRS is that the properties involved in the transaction must be "Like Kind" and Both properties must be held for a productive purpose in business or trade, as an investment.

You can retain the mortgage in your name and do the quit claim or grant deed to have the title in his name. However, as Larry mentioned, consult your lender and advise them on what you did and they will direct or consult you. You may want to consider putting the title in both you and your sons named

Jeanette Smith
Mortgage Planner
Union Mortgage Group
www.umgva.com

Guest

Thank you for your help. Virginia

Guest

Hi Virginia,

In regards to removing yourself and husband off title, Lenders do not traditionally allow this because if they had to foreclose on the property, they would have a tough time coming after you or your husband since you would no longer have an interest in the property, but the original terms of the loan were with the two of you in consideration. A lender will want all parties in credit on the title to the property which will provide them more security. Also you will be bound to all the rules of your 1031, so would definately talk with an Attorney prior to changing any status to title.

Hope that helps! Very Happy

Aj

Guest

during my divorce ,he quitclaimed the house to me , my exs mother was cosigner and they wanted her name off and i need someone else to cosign, the bank redone the loan, causing me to lose 5yrs of payment around 15,000 was this fair for them to make me redo the loan after it was guitclaimed to me , could my cosigner just signed the original and save me that money thanks,

Guest

Hi cgoforth,

What I understand from what you've mentioned is you were given the title to the property, but the loan was in you and your ex's mother's name. Thus, when they quitclaimed the house they wanted you to refinance it in your name to remove her name from the loan. Right? Well. if this is the case then it is quite ok. This is what is done by people in these situations.

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