Can my father deed one of his houses to me, along with his low mortgage payment ? Could i claim the interest?

Question

Basically, I want to pay for a house using my dad's good credit.

Answer 1

The short answer to your question is yes your father can deed the property to you. He can not do anything about the mortgage it will remain in his name even if you are making the payments.

The best way to have your father deed the house to you is to call an title company from your telephone book, set up an appointment and sign a quitclaim deed from him to you. This might cost a bit more but will save you potential problems in the future. The title company willl insure the deed is recorded at the county recorder's office.

You can also appear in front of a notary, where both you and your father sign the deed, after which the notary notarize the deed then you have to make sure it is recorded at the county recorder's office.

Now about the mortgage, yes most have a due on sales clause. I would not concern myself with it. The most important thing for you to remember is that the loan is still in your father's name, if you don't make the monthly payments on time the lender will start sending him late notices.

You see the lenders even know that property is transferred without the lender being told, because if you pay the mortgage for a year and have your cancelled checks to prove that you have made the monthly payments most lenders will treat you as a refinance as oppose to a purchase. So they know that this goes on, even though it is in their contracts.

As far as the interest deductions on the house as long as you can prove through cancelled checks or other means that you are in fact the one making the monthly payments each month and your father is not claiming the interest you should be ok with the IRS. (Please check with your tax advisor for any tax advise)

I hope this has been of some use to you, good luck.

"FIGHT ON"

Answer 2

Most likely, no. Very few mortgages are "assumable" which is what you want-- and even if they are, most often you still have to qualify on your own as far as income/credit standards.

He can add you to title using a quit claim and you can make the payments for him, but in order for you to be on a mortgage and for full transfership it would be dealt with as a sale.

However if he's willing to gift some equity you could still qualify for a really great rate on your own. OR he can do a "carry back" and you pay him monthly payments, for say, 20% of the value, so you qualify for the best mortgage but he's still getting the full value.

If you want to keep payments low, you could do a standard mortgage (around 6.5% for the 80% of the house) and then an interest only with your dad-- if he'll give you like a 4% interst only loan you could get into it for hundreds cheaper each month, and then in 5 years when your credit is stronger and you have equity, refi int your name only.

Answer 3

I sold my house to my daughter and she got her own loan with her husband but you can just take over the payments of your fathers house.

If your not interested in establishing credit on your own.

I don't know exactly what you mean by claiming the interest. I think you might mean the equity built up in the home. That is the wonderful value of a home. Once you buy it you can use it to pay off all your credit and have 1 affordable payment per month. Some people feel thats cheating but I say do what you have to do to eliminate debt and be able to afford to live.

Answer 4

Message from above: You see the lenders even know that property is transferred without the lender being told, because if you pay the mortgage for a year and have your cancelled checks to prove that you have made the monthly payments most lenders will treat you as a refinance as oppose to a purchase. So they know that this goes on, even though it is in their contracts.

As far as the interest deductions on the house as long as you can prove through cancelled checks or other means that you are in fact the one making the monthly payments each month and your father is not claiming the interest you should be ok with the IRS. (Please check with your tax advisor for any tax advise)"

1st - If you pay on the home for 1 year or more (PLEASE have a Land Contract filled out) Lenders will want to see the land contract and 12 - 24 months cancelled checks (front and back) as proof that this has been paid on time. It is even better if the land contract is recorded at your local court house. This is called a paper trail, that Lenders LOOK for. You will be responisble for the property taxes and home owners insurance, since you are buying it on land contract. You will need to go to the court house 1 month after the land contract is filed, and file for the mortgage exception credit and any other credits allowed in your state, this will lower your property taxes.

2nd - Mortgage Interest - The mortgage interest is in your fathers NAME, and thus reported to the IRS as such. Your interest on the land contract is tax deductable, but please see a acountant or tax attorney - for laws in your state (ok). That will save you money in the long run - and always make sure you get it in writing, of what the attorney tells you to do (if you can).

He can deed the home to you, and you can pay his payments, but it is not reported on your credit report. Now he could sell the home to you, and you go under your credit, If your credit is not good - than there are a few things you can do.
1. Have him add your name to his credit cards, have the company send the credit card with your name on it to him. He hold it in is possession. You do not use it. But his timely payments will also be reported on your credit report, as good credit. Do this with another parent also - if you can.. This will build up your credit. Wait 2-3 months for it to build up your credit, than pull your credit or have someone pull it for you, with your credit scores. If you have 2 years job time, and the credit, you could purchase the home yourself in your name. With out the hassel of quick claim deed, etc. Just a thought (ok)

Good luck to you.

Answer 5

Consult a tax professional regarding any tax implications. He could easily put you on a contract for deed, and you would then get the interest benefit. According to the IRS, you must be liable for the debt to be able to claim the deduction.

If you do a contract for deed (nice way of saying seller-financing), you run a small risk that the bank could call his loan due though, since he's effectively sold you the property, and almost every mortgage has a "due on sale" clause.

After the tax advisor, find a real estate attorney.

Answer 6

the final rule is that you'll declare the cost in case you a million. were legally to blame for the cost, and a couple of. absolutely paid the cost. so that you'll't declare the loan interest (you're not to any extent further legally to blame for the cost) yet you could declare the taxes (you're both susceptible to the county (you're on the deed as an proprietor) and also you paid the cost).

Answer 7

No, he cannot give the mortgage to you and have it off his credit.

He signed for the mortgage, and he's responsible for it. You can take over payments for him, but he's still responsible for paying it if you stop.

Update: Someone else mentioned it, I left out this possiblity that it is an assumable mortgage, which would negate my answer.