Posted on: 13th Apr, 2007 04:04 pm
my friend and i both of our names are on the loans of a condo and a house. we still owe monies on them. and now, we want to go our separate ways. i want to have the condo in my name only and she wants to have the house in her name only.
so should we refinance so that the condo will be in my name and the house will be in her name? do we also need to do quit claim deeds? since the house is worth more than the condo, she is willing to give me $50,000 cash after she refinanced the house in her own name.
my main concern is that: is this legal & do i have to pay taxes because i received from her $50,000? thank you. marie.
so should we refinance so that the condo will be in my name and the house will be in her name? do we also need to do quit claim deeds? since the house is worth more than the condo, she is willing to give me $50,000 cash after she refinanced the house in her own name.
my main concern is that: is this legal & do i have to pay taxes because i received from her $50,000? thank you. marie.
Hi Marie,
Welcome to Mortgagefit discussion board.
As there are loans on both the condo as well as the house you should refinance the respective loans in your separate names. By doing that you will be certain if she stops payments on her mortgage, your credit will not get affected.
Quit claim deed is required to transfer the title of the house and it can be made out at the time mortgage is refinanced.
Thanks
Blue
Welcome to Mortgagefit discussion board.
As there are loans on both the condo as well as the house you should refinance the respective loans in your separate names. By doing that you will be certain if she stops payments on her mortgage, your credit will not get affected.
Quit claim deed is required to transfer the title of the house and it can be made out at the time mortgage is refinanced.
Thanks
Blue
"So should we refinance so that the condo will be in my name and the house will be in her name?"
I agree with Blue, as you will no longer retain any rights over the house you need not be on the mortgage for the house that she will be keeping.
And quit claiming titles will be necessary as lender will require each one of you to have ownership rights over the property for allowing a refinance.
Miller
I agree with Blue, as you will no longer retain any rights over the house you need not be on the mortgage for the house that she will be keeping.
And quit claiming titles will be necessary as lender will require each one of you to have ownership rights over the property for allowing a refinance.
Miller
As long as lender knows about your intentions to change the ownership rights each one has for condo, the house and both mortgages are refinanced in individual names, it is quite legal.
You should get in touch with your lender and explain the details, and lender as far as my information goes will not have any objection to it.
You should get in touch with your lender and explain the details, and lender as far as my information goes will not have any objection to it.
Marie,
As you will be transferring your interest in the house using a quit claim deed for a value lesser than its current market value, it will be considered as a gift for tax purposes. And any applicable gift taxes may have to be paid.
But there is annual gift tax exemption limit of $12,000 up to which no gift tax will become due. And even if you cross this annual limit you may not have to pay tax if the life time gift tax exemption limit of $1 million is not crossed. But you will have to file gift tax return.
So by receiving $50,000 you will not have to pay any gift tax if you have not crossed the lifetime exemption limit though the amount you will get is more than the annual exemption limit.
David
As you will be transferring your interest in the house using a quit claim deed for a value lesser than its current market value, it will be considered as a gift for tax purposes. And any applicable gift taxes may have to be paid.
But there is annual gift tax exemption limit of $12,000 up to which no gift tax will become due. And even if you cross this annual limit you may not have to pay tax if the life time gift tax exemption limit of $1 million is not crossed. But you will have to file gift tax return.
So by receiving $50,000 you will not have to pay any gift tax if you have not crossed the lifetime exemption limit though the amount you will get is more than the annual exemption limit.
David
"My friend and I both of our names are on the loans of a condo and a house. We still owe monies on them. And now, we want to go our separate ways. I want to have the condo in my name only and she wants to have the house in her name only."
Yes I too feel as you two are separating now clearly dividing the property will be better so that problems do not arise in future.
And why do you think it will not be legal? It is perfectly legal, you have a property and you transfer it to someone that is what is happening. Nothing illegal with it. Go ahead.
Yes I too feel as you two are separating now clearly dividing the property will be better so that problems do not arise in future.
And why do you think it will not be legal? It is perfectly legal, you have a property and you transfer it to someone that is what is happening. Nothing illegal with it. Go ahead.
Yes Holymary, you can refinance the condo in your name and the house can be refinanced in your friend's name. You need not do a quit claim deed separately.
When you refinance, there will a closing arrangement where title to the condo and the house will be transferred to the respective owners. You may contact a title company for the closing and they will look into this matter.
If your friend is willing to give you $50,000, that's a good thing and legal too. There isn't any tax to be paid here.
When you refinance, there will a closing arrangement where title to the condo and the house will be transferred to the respective owners. You may contact a title company for the closing and they will look into this matter.
If your friend is willing to give you $50,000, that's a good thing and legal too. There isn't any tax to be paid here.