Should my wife and I take over our parent's house?

Question

What should we lookout for if we take over the payments of our parent's house? What do we need to do? What are the pros and cons?

Thanks in advance!

My parents are travelling back and forth between two different countries. 6 months here...6 months there. They want to know if we're interested in taking over the house so that they have a place to stay when they come back to visit.

I heard about the "Quit Claim" forms. What should we lookout for if we take over the payments of our parent's house? What do we need to do? What are the pros and cons?

Thanks in advance!

Answer 1

You can take over payments, yes... but that doesn't put you in the title, which means you can make payments for several years and legally still get evicted.

The catch is that if you change title, the mortgage company may foreclose because technically they'd want to place the loan in your name. The reasoning is that someone with no title (parents) would not necessarily have incentive to make sure the loan payments were made, if you had title, because the parents would no longer be enjoying the benefit of living in the house.

Buddy, you don't want to be in a situation where you're paying and not on title. Family situations change - relatives die and things start changing hands. It's easy to say it's fine and dandy while no such event is going on, but the last thing you need is such a surprise where you assume title is going to be passed to you and it doesn't.

Also, you should be aware of any liens and encumbrances on the property as well. These can be a real headache later. It's worth spending the money on a title insurance company to have your business straight. I saw a question here the other day where somebody didn't bother to get title insurance, and they paid dearly.

good luck.

Answer 2

That is hard to answer without much more information. Why do you want to do this?
Can you afford it with your own home payments?
Are your plans for the future realistic? What do you plan to do with the house; there is a big difference between "taking it over" and "taking over payments"?

If it is a matter of payments, you can have yourself added to the mortgage without too much bother if that is what you want. If you want clear title, and this is a major issue you should decide, you should consult with a lawyer. At the very least you should ensure that YOU get the house when your parent's pass on and that there are no unpleasant surprises in their will that would pass it to others.

Answer 3

You can buy it on a "contract of sale" - that is done directly with them assuring that the house will pass to you when the contract is fulfilled. You could try to assume the loan or jut keep it under their name but claim the interest on your tax return - like you paid the interest to them, they claim it as income and then claim the offset against what the mortgage company reports to the IRS. You will want a Quit Claim deed to the house - they quit whatever claim they have and when the bank is paid the title will pass to you. You really should get a lawyer - family can get funny sometimes.

Answer 4

You can pay back any late payments and start making regular payments. The bank will be happy to waive late fees if you are willing to pay past balances, just ask. Then continue to make the regular payment. Don't transfer the debt, leave it in the parents name. You will be amazed at how the mortgage company will respond to your effort to help.

Answer 5

Do they want you to take the morgage? You can assume it, that's the eaisiest way, plus the lawer fees are cheeper. Plus you don't need a credit check. The lawer will put the house into your name, but if you do not pay the morgae for the first year it falls on your parents. I assumed my first morgage

Pumpdat, I was thinking the same thing too! Lol, I just didn't know how to word it nice ;)

Answer 6

You married your sister???!!??

Just kiddin... Are they giving it to you? Talk to tax attorney about consequences. Family trust offers options. If your parents require long term care, medicare can sometimes come after assets for payment, up to 5 years after family transfer.