How difficult is it to switch the name on a mortgage title within family members?

Question

My wife with her parents as co-buyers bought the house in which we currently live 12yrs ago. Though I have made all of the payments for the last 4 years(since marriage) and spent around 40K in remodeling etc. we have never taken steps to alter the mortgage agreement. We recently made an offer on our "dream house" (which was accepted). I have been approved for up to 100% financing on the new property if needed, but they require a significant figure in liquid accounts to extend that option. We just placed our house on the market and expect it to sell shortly but we are trying to investigate on the possibilities of getting a bridge loan on our current home to ensure everything goes well with the purchase of our new home.Any advice?

Answer 1

It is going to depend on the laws in your state. Some states do not allow a change of title if the mortgage is in a different name. These are called "mortgage" states. CA is a "Deed of Trust" state and does not have this requirement so it is very easy to do at any title company no matter whose name in on the home loan. Check with a professional in your state.

A bridge loan may be a good idea. In many cases, you can pull equity out of your present home and use it to purchase another property. The payments on the bridge loan can be escrowed so that means you would have no out of pocket mortgage payments for 6 to 9 months. Sounds good, doesn't it? However, after the 6 to 9 month period, the bridge loan is due in full so you might have to refinance the property again just to payoff the bridge loan if the house does not sell in time. I have seen this nightmare play out many times. I have past clients that are just drowning in debt thanks to two mortgage payments they have to pay to save thier credit rating. It is only a matter of time before they are in financial ruin.

Might be a little late in the game for you, but I tell most of my clients to find a real estate professional that is familiar with the buying trends in your area. If they are honest, they will let you know how long it is taking for similar properties to sell in your market. Be sure they can back it up with market data. Be careful, most RE Agents are just salespeople that are more interested in a commission that your financial well being. I have seen far to many people that assumed that thier home would sell quickly, only to find out it may take months and in some cases, years for thier property to sell. In many cases, The selling price is far less than what the real estate agent told them they can get for thier home initially. Ask yourself if the worst case scenario plays out (remember Murphy's Law) can you afford to pay 2 or more mortgage payments and for how long. If the answer is yes, then you might want to go ahead and get the bridge loan. If the answer is no, then you might want to just sell your current home before you buy another.

Many real estate agents will tell you to put a "sale" contigency on the purchase contract of the new property. This would require that your present home be sold before you can close escrow on the new home. This is an option, but it also can make you a less desirable buyer. If the seller is in a hurry to sell, then they might not want to wait 6 months for you to sell your house.

Hope this helps.

8 yrs Mortgage and Finance experience

Answer 2

Transferring title to another person will not affect the mortgage contract you signed with the mortgage company. You do not need the approval of your lender to change the person on the title to the property. The same persons that signed the mortgage loan docs are still responsible for making the monthly mortgage payments and living up to the terms of the contract they signed. The person you add to the title will have no responsibility for the monthly mortgage payments, but you may not do anything with the property without the new person's signature. So you will not be able to sell or refinance the property without the approval of the person you added to the title. Call a local title company, make an appointment to get the deed transferred to the one that will own the house. Tell the title company what you want to do. The title company will normally charge a fee for their services. You might ask, when you call of the cost for their service. After all have signed the proper deed the title company will then ensure that the deed is properly recorded at the county recorders office that the property is located in. Please use a title company and not an attorney for this transaction. Going through a title company could prevent possible legal problems in the future. About the tax consideration, that depends on the value of the property, so you should consult with your tax consultant about any possible tax consequences. If there is a mortgage on the property you should decide who will make the monthly mortgage payments and who will be responsible. I hope this has been of some use to you, good luck. "FIGHT ON"

Answer 3

Title to the property and responsibility for a loan payment are two different things. You do not need title ownership to be a co-signer to a bridge loan as long as the titled owners also sing.
To get your names on the deed of record yopu will need a realestate lawyer to file new documents at the courthouse. This should only cost in the 75-100 range and take 3-4 days total.pp

Answer 4

The only way that you can change the names on a mortgage contract is to pay it off and replace it with a new mortgage. Sorry, but that's the only way.

To get a bridge loan, everyone on the current deed will need to sign on the bridge loan. If your wife's folks are not willing to do that, you can't get a bridge loan.

Answer 5

No need to switch anything now. Just bring her parents to the closing of the sale of your current home.

Meanwhile, I don't know what "significant figure" means, but I'm assuming that's only 6 months of reserves, which is a lot but could be worse.

I'd talk to another couple loan officers