mother's health is on the decline and is unable to continue working. son is financially able to pay for the house, so that the family does not lose the house as it has been in the family for years.
2006-08-27 05:15:20 · 5 answers · asked by cat 1 in Business & Finance ➔ Renting & Real Estate
If the loan is assumable, she could sell him the house for the outstanding balance of the loan and he would assume the mortgage. This would cut the rest fo the family out of any inheritance, though.
Most mortgages do have a due on sale clause and her death would constitute a sale in that context. As a practical matter, the mortgage lender probably doesn't care who is making the payments as long as they get their money.
Another option would to be to set up a trust and transfer the home to the trust. Again, you do have the due on sale issue to deal with but this typically isn't a problem. Worst case would entail refinancing the mortgage with the trust as mortgagee and her son as guarantor of the mortgage.
Consult with a local attorney for advice specific to your situation.
2006-08-27 05:25:23 · answer #1 · answered by Bostonian In MO 7 · 0⤊ 0⤋
I'm not exactly sure....you two need to see an estate lawyer to make sure he doesn't end up paying too much in taxes because it was a gift. He may end up paying more out to the IRS than he would paying for a lawyer and "buying" the house for a small price.You could in turn even give him the money back but he'll need a paper trail to prove that he bought the house. I'm sure somebody will answer your question that knows the exact term (is it capital gains tax??) Then there is the loans already on the house to think about if there is one.
You'll need the lawyer anyway to get it out of your name and into his. ( I wrote this assuming the mother asked the question)
2006-08-27 12:31:33 · answer #2 · answered by jescl32 3 · 0⤊ 0⤋
You might want to consult a lawyer...one that specializes in elder issues. My 85 year old father wanted to transfer his house to his 3 grown children. When we consulted a lawyer, we found out that it is much better to inherit the house because of how taxes are handled when a home is transferred. The lawyer had a legal way to protect the house from being taken if my father should go into a nursing home.
2006-08-27 12:38:41 · answer #3 · answered by Anonymous · 0⤊ 0⤋
If you still plan on living there you could do a life estate. If you owe the house free and clear then you could do a quick claim deed to your son. I would consult you tax accountant for the best way if you are trying to avoid taxes.
2006-08-27 14:44:52 · answer #4 · answered by Anonymous · 0⤊ 0⤋
If there is still a mortgage on it, Mom would have to sell it to the son. She can "gift" him the equity and sell it for the balance of the current mortgage and the closing costs.
2006-08-27 12:26:21 · answer #5 · answered by staceydian 2 · 0⤊ 0⤋