Just in case something were to happen to them in the unforeseen future. They have good credit as do I, but I plan on buying a home in about 2 to 3 years as well. Shouldnt they just create a WILL?
2007-02-08 09:01:24 · 9 answers · asked by mankoman45 1 in Business & Finance ➔ Renting & Real Estate
You're insane if you sign. You will be on the hook for it and you won't own it. When they die, it'll have to go through probate as you make the mortgage payments. Probate will take at least 6 months. And you'll have to share it with siblings while you're making 100% payments.
Their request was somewhat selfish. The reason they need a co-signer is because their credit is very bad.
2007-02-08 09:10:05 · answer #1 · answered by girl with a gun 2 · 0⤊ 1⤋
If you're buying a home in a couple years, you can exclude their housing payment by showing cancelled checks for 6-12 months proving that they are the ones making the payment, so that part is ok.
That being said, they really need to talk to a family law attorney and get a better plan going.
When your parents die, you inherit their real estate (and stocks) at their "stepped up" value, the value of the property on the day they die. So if you sell it, you pay no capital gains tax. If you already own it, but are not living in it, you would owe gains taxes. Apparently farmers screw themselves up sometimes by adding their kids to the deeds before they die, and they have to borrow or even sell the land just to pay the taxes.
They could explore a trust, or something like that, but to do what they are thinking, is probably not a wise plan.
Understand that even paying a few hundred bucks for an attorney to help them plan is far cheaper than costing yourself potentially tens of thousands of dollars in unnecessary taxes.
And you could just be added to the deed, instead of actually being on the financing with them too. But again, not a good idea.
Nice idea, wrong execution. Find a good attorney and maybe even a tax advisor.
2007-02-08 09:16:34 · answer #2 · answered by Anonymous · 0⤊ 0⤋
I understand what they are attempting to do. It has nothing to do with them having you co-sign for the loan because they are not able to make the payments.
They want to make sure that you get the house if something happen to them. Tell them there is a better way to do that.
Your parents should get a revocable living trust,making you the trustee with the house in the trust. If something should happen to them, you then you would get the house without going through probate. They should make a will for other things.
You should have them see an estate planner or attorney to set up the trust and seeking legal advice.
Under this method if will keep your name off the loan, so when you are ready you may purchase a house of your own. They will be in complete control of their house and in the event something happen the living trust will indicate that you are to make the decisions as to what goes on and how things are to go.
I hope this has been of some use to you, good luck.
"FIGHT ON"
2007-02-08 09:18:29 · answer #3 · answered by Skip 6 · 0⤊ 0⤋
Your parents are not making you cosign the promissory note, but merely putting you on the mortgage and the title because they can't put you on the title without having you on the mortgage too. They are doing this to allow you to receive full title to the house outside of "death taxes" commonly associated with property inherited through a will.
Since your name is not on the promissory note, any default on their part will not effect your credit, nor will it inhibit your own purchase of a house in the future. Having your name on the mortgage simply protects the lender's interest in the property but in no way requires you to pay any of the loan at any time.
2007-02-08 09:19:48 · answer #4 · answered by linkus86 7 · 0⤊ 0⤋
They do not have to add you to the loan to leave the house to you. The loan has nothing to do with ownership of the house. If i wanted you to have the house i was living in i could quick deed you on. The loan still in my name but if i die then you get to plan the next action weather to take on the mortgage or sell the home. If you do not want to mortgage on your credit then don't sign. When you go to get a house in the next two years you are going to have to prove that you are not making payments so it does not hurt you DTI %. I am refiing a guy right now that did that for a Buddy and we had to get one year worth of canceled checks in his buddies name to prove he just cosigned and does not have ownership interest in the house. It is kinda of a proccess and sucks but if it helps your parents and you dont care go ahead.
2007-02-08 09:56:48 · answer #5 · answered by Anonymous · 0⤊ 0⤋
When you cosign you are just guaranteeing the loan. It has nothing to do with a will. It they die with a will they can give the house to you and you can take over payments or sell it. Becoming a cosigner will hurt your chances of getting your own mortgage in the future.
2007-02-08 09:06:12 · answer #6 · answered by Barkley Hound 7 · 0⤊ 0⤋
Cosigning just means you will pay off their house if they don't.
maybe they just want you to buy them a house...parents are sneaky like that.
Ah, what the heck; they gave you life..do it
2007-02-08 09:12:13 · answer #7 · answered by AuntTater 4 · 0⤊ 1⤋
They should create a will and leave it to you. If they cant make payments if they get really old it will fall on you
2007-02-08 09:05:09 · answer #8 · answered by Tiffany J 1 · 0⤊ 1⤋
Its a bad idea, just have them will it to you.
They could also add you to the deed, but not make you part of their loan.
Good luck
2007-02-08 09:10:41 · answer #9 · answered by frankie b 5 · 0⤊ 1⤋