Posted on: 13th Sep, 2006 08:18 pm
i bought the house 6 yrs ago and had some problems about 1.5 yrs ago and had to refinance the property into my parrents name. i never moved out and i have been making the payments to the mortgage company the whole time. now i want to sell the house is there any way to get it back into my name or any way around them selling the house and paying capt. gains tax then me paying gift tax on the money
hi,
since you are still paying for the mortgage, you cannot sell the house until and unless you can transfer the loan to another person through novation. or else, you will have to find a buyer who is willing to assume your mortgage, which means, he wants to take the liability of paying for the loan. but this will depend on the lender. you can only allow someone to assume a mortgage if the note mentions this.
if any of the conditions are satisfied, your parents can sell off the property. but if you wish to sell it, then you can request your parents to transfer the rights of the property to you. a warranty deed can be useful in this regard.
you need to get a deed prepared by the attorney and then complete all legal formalities as suggested by him.
know more about novation and warranty deed before you proceed to sell the home.
thanks,
caron.
since you are still paying for the mortgage, you cannot sell the house until and unless you can transfer the loan to another person through novation. or else, you will have to find a buyer who is willing to assume your mortgage, which means, he wants to take the liability of paying for the loan. but this will depend on the lender. you can only allow someone to assume a mortgage if the note mentions this.
if any of the conditions are satisfied, your parents can sell off the property. but if you wish to sell it, then you can request your parents to transfer the rights of the property to you. a warranty deed can be useful in this regard.
you need to get a deed prepared by the attorney and then complete all legal formalities as suggested by him.
know more about novation and warranty deed before you proceed to sell the home.
thanks,
caron.
my parrents know i want to sell it and are trying to help me throught the process. we are trying to get the full amount out of the house like it was never out of my name .and also trying to avoid getting taxed out of all my proffit since i will need the money to buy another house does this novation and warranty deed still apply thanks for all the help.
Hi,
I feel that both novation and warranty deed will apply if you don't have your name on the title to the property. And, your parents need to transfer their rights to you through warranty deed. The transfer of loan and the property must be shown in legal papers and that's why I suggested a novation and warranty deed.
Thanks,
Caron.
I feel that both novation and warranty deed will apply if you don't have your name on the title to the property. And, your parents need to transfer their rights to you through warranty deed. The transfer of loan and the property must be shown in legal papers and that's why I suggested a novation and warranty deed.
Thanks,
Caron.
Hi,
I would like to add one more thing in addition to what Caron has mentioned.
It is that your parents if they do not transfer the property in your name and sell it in their own name, then they will get a higher tax exemption for the profit in comparison to what you will (I am mentioning this assuming you are single).
The laws state that if you sell your house and make a profit then that profit will not fall into taxable income up to a limit of $250,000 and $500,000 for a married couple, if a person or the married couple have lived in the house for two years out of a total of five years before the house is sold. Those two years also need not be consecutive.
So, that way you and your parents can save more out of your profits, of course, if you anticipate the profit is not going to exceed $250,000 then it will not be a factor whether you or your parents sell it.
I hope this information will be of some help to you.
Thanks
James
I would like to add one more thing in addition to what Caron has mentioned.
It is that your parents if they do not transfer the property in your name and sell it in their own name, then they will get a higher tax exemption for the profit in comparison to what you will (I am mentioning this assuming you are single).
The laws state that if you sell your house and make a profit then that profit will not fall into taxable income up to a limit of $250,000 and $500,000 for a married couple, if a person or the married couple have lived in the house for two years out of a total of five years before the house is sold. Those two years also need not be consecutive.
So, that way you and your parents can save more out of your profits, of course, if you anticipate the profit is not going to exceed $250,000 then it will not be a factor whether you or your parents sell it.
I hope this information will be of some help to you.
Thanks
James