Should I add my name to my Mom's mortgage for tax savings reasons?

Question

I currently work for a large corporation earning a salary. My question is this: should I add my name to my Mother's mortgage so that I may be able to write-off the mortgage interestpaymentsand taxes? Thank you for taking the time to read this.

Answer 1

Most times you can't just add your name to a mortgage. It's a loan. You would have to apply for a refinance jointly and get credit approval from the lender. If your name is not on the title, it may not be considered home mortgage interest for you. If it's not home mortgage interest, it's either non deductible personal interest, or it's investment intererst deductible only if you have investment income (interest, dividends, capital gains). The taxes would not be deductible by you if you're not on the title.

If I were your Mom, I'm not sure I'd want to just give up what can be a sizeable tax shelter unless my income was low enough that it doesn't give me any benefit.

There are legal issues here as well as tax issues; you should consult with an attorney knowledgeable in real estate law in your state. If you do not structure this properly you and your Mom could lose more than you gain.

Answer 2

You can't just "add" your name to her mortgage. And you're not an owner of the property so you can't deduct real estate taxes either.

She'd need to deed an undivided one-half interest in the property to you and then you'd need to do a joint refinance of the mortgage.

Giving away half of her equity to you may not be what she wants to do. And it could have Gift Tax consequences depending upon the equity that she gives you.

Answer 3

Assuming that all of the very good points mentioned by others (above) were met, you would, in addition, have to be the one making the payments in order for you to qualify to deduct the interest on her mortgage.