Posted on: 19th Apr, 2010 01:15 pm
We bought a small home for our son to move into to with the intention he would buy from us. For all intent purposes, he owns the home because even though the mortgage, etc. is in our name, he has been making the payments. So the equity is his anyway. Now that he is more established, we are looking for the best way to sell him the house.
Should we add him to the deed and then assume the mortgage? Should we do the gifted equity and does this pay the closing costs? Help with PMI, etc.?
BTW, we both live in Wichita, KS if that helps.
Thank you!
Should we add him to the deed and then assume the mortgage? Should we do the gifted equity and does this pay the closing costs? Help with PMI, etc.?
BTW, we both live in Wichita, KS if that helps.
Thank you!
Hi sgruning!
Welcome to forums!
You can simply transfer the property to your son by using a quit claim deed. Your names would be mentioned as the grantor whereas your son's name would be mentioned as the grantee to the property. Once the property is transferred to him, he can then refinance the loan in his name. However, if you transfer the property as a gift, you'll be liable for paying gift taxes.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
You can simply transfer the property to your son by using a quit claim deed. Your names would be mentioned as the grantor whereas your son's name would be mentioned as the grantee to the property. Once the property is transferred to him, he can then refinance the loan in his name. However, if you transfer the property as a gift, you'll be liable for paying gift taxes.
Feel free to ask if you've further queries.
Sussane
Thank you Sussane! I thought I would only pay taxes if the amount was over IRS reg something around $11k? So it looks like a quit claim deed will be the way to go, and then perhaps he can assume the mortgage payments.
I am not really seeing much of a benefit on Gifted Equity other then it may eliminate PMI. After further research, gifted equity wound not pay the closing costs, appraisals, etc? Correct?
I am not really seeing much of a benefit on Gifted Equity other then it may eliminate PMI. After further research, gifted equity wound not pay the closing costs, appraisals, etc? Correct?
Hi sgruning,
It would be a good option to transfer the property with the help of a quit claim deed and then refinance in order to take over the loan.
As far as I know, you would be able to use the gift of equity as a down payment to purchase a property or refinance it.
Thanks
It would be a good option to transfer the property with the help of a quit claim deed and then refinance in order to take over the loan.
As far as I know, you would be able to use the gift of equity as a down payment to purchase a property or refinance it.
Thanks