Posted on: 10th May, 2006 11:19am
Quitclaim deed is a legal document using which you can convey your share of property-interest to another person. The deed indicates that the title is conveyed from the grantor (transferor) to the grantee (transferee). But it does not guarantee that the grantor holds the legal rights of ownership. The deed also does not imply that the title is free of liens. The quitclaim deed merely states that there has been a transfer of interest from one individual to another.
Thus, when you transfer property rights, a quitclaim deed serves your purpose. But you cannot transfer mortgage debt or any financial obligation through the deed. If there is a mortgage on the property you wish to transfer, you'll have to pay off the debt prior to the transfer and make the title free and clear. Otherwise, you'll have to transfer the loan as well.
In order to transfer a mortgage to the grantee, you'll have to convince the latter to refinance the loan in his/her name. And, at the time of refinance closing, you can sign on a quitclaim or grant deed in order to transfer the property to the grantee. Alternatively, you can transfer the title first and then have the grantee refinance the mortgage in his name. But before you do so, get it in writing from the grantee that he'll refinance as soon as you convey the title. Otherwise, you'll (the grantor) be left to pay off the loan entirely without having the property in your name.
Another way by which you can transfer mortgage debt while quitclaiming property is Novation. To know How novation works , refer to a forum discussion on this topic.
a friend of ours is having financial difficulties and is behind in his house payments, he is wanting to do a quit claim deed transfer to us and we would take over the house payments to bring it up to date and finish paying for it. are there legal complications in doing this since he still owes money? should we go to the bank instead?
Hi-
My parents are willing to help me purchase a home due to my poor credit history (i signed for a motorcycle for an ex who defaulted on the loan, along with my own pre college credit card debt that I didn't take care of properly). I am just finishing up on paying off all my debt, and have a great steady income. Since my parents credit history is steller we've talked about them purchasing the house and me making the payments and holding the title to the house alone. I just don't know what the best way to go about this...I'm concerned with taxes due on transfer of ownership/gift? and my financial responsibilities (and tax benefits/write offs), and other matter such as "due on sale" if we do a quitclaim deed. Is there a way for me and my mother to purchase together? Or will my poor credit increase interest rate on morgate despite her excellent credit? Should I just wait to get my credit score higher? Your input is greately appreciated. Thank You.
My parents are willing to help me purchase a home due to my poor credit history (i signed for a motorcycle for an ex who defaulted on the loan, along with my own pre college credit card debt that I didn't take care of properly). I am just finishing up on paying off all my debt, and have a great steady income. Since my parents credit history is steller we've talked about them purchasing the house and me making the payments and holding the title to the house alone. I just don't know what the best way to go about this...I'm concerned with taxes due on transfer of ownership/gift? and my financial responsibilities (and tax benefits/write offs), and other matter such as "due on sale" if we do a quitclaim deed. Is there a way for me and my mother to purchase together? Or will my poor credit increase interest rate on morgate despite her excellent credit? Should I just wait to get my credit score higher? Your input is greately appreciated. Thank You.
Hi,
"Should I just wait to get my credit score higher?"
If you intend to buy the house on your own by taking a mortgage in your name only, then you can definitely wait for your score to get higher so that you can qualify for better interest rates in future.
Thanks,
Sara.
"Should I just wait to get my credit score higher?"
If you intend to buy the house on your own by taking a mortgage in your name only, then you can definitely wait for your score to get higher so that you can qualify for better interest rates in future.
Thanks,
Sara.
Hi avpdays,
"Is there a way for me and my mother to purchase together? Or will my poor credit increase interest rate on morgate despite her excellent credit?"
You can make your mother the primary borrower on the loan while you become the co-borrower. Since your mother has excellent credit, so she can get qualified for a home loan and thereby secure a reasonable rate of interest. Otherwise, your poor credit will not allow you to avail a better rate.
After your mother gets the loan, she can transfer it to you by novation and quit claim the property to you. So, you will be getting the interest in the property and at the same time you will also be liable for monthly payments on mortgage. But one needs to request the lender for the Novation as he may or may not allow for it.
Alternatively, you can also shop around for a lender who will offer you a loan program at your credit score and income. You say that your credit isn't favorable enough to get a good rate. But you do have good income, so you can start shopping with a number of lenders in order to choose the best out of them.
Feel free to clarify your doubts.
God bless you
Samantha.
"Is there a way for me and my mother to purchase together? Or will my poor credit increase interest rate on morgate despite her excellent credit?"
You can make your mother the primary borrower on the loan while you become the co-borrower. Since your mother has excellent credit, so she can get qualified for a home loan and thereby secure a reasonable rate of interest. Otherwise, your poor credit will not allow you to avail a better rate.
After your mother gets the loan, she can transfer it to you by novation and quit claim the property to you. So, you will be getting the interest in the property and at the same time you will also be liable for monthly payments on mortgage. But one needs to request the lender for the Novation as he may or may not allow for it.
Alternatively, you can also shop around for a lender who will offer you a loan program at your credit score and income. You say that your credit isn't favorable enough to get a good rate. But you do have good income, so you can start shopping with a number of lenders in order to choose the best out of them.
Feel free to clarify your doubts.
God bless you
Samantha.
I think the best way to go about it is to wait till you can build up good credit score which will in fact help you to qualify for loans at affordable rates of interest.
If the loan has a due on sale clause, then your mother cannot quit claim the property if she takes a loan against the house. The clause gives the right to the lender by which he can demand the outstanding loan balance from the borrower.
Hi Avpdays,
"I'm concerned with taxes due on transfer of ownership/gift? and my financial responsibilities (and tax benefits/write offs), and other matter such as "due on sale" if we do a quitclaim deed."
If your mother takes a loan as primary borrower in order to purchase the house and then transfers you the interest through quit claim, then she needs to pay Gift tax under certain circumstances. It's not your liability to pay the gift tax. And, as far as getting tax benefits are concerned, you may be able to receive tax deduction on mortgage interest after the loan is transferred in your name. But there are certain conditions under which you can qualify for this deduction.
For more idea on the Tax deduction on interest , refer our previous discussion. Also, know about the Tax Implications of Quit Claim .
Regards,
Jessica.
"I'm concerned with taxes due on transfer of ownership/gift? and my financial responsibilities (and tax benefits/write offs), and other matter such as "due on sale" if we do a quitclaim deed."
If your mother takes a loan as primary borrower in order to purchase the house and then transfers you the interest through quit claim, then she needs to pay Gift tax under certain circumstances. It's not your liability to pay the gift tax. And, as far as getting tax benefits are concerned, you may be able to receive tax deduction on mortgage interest after the loan is transferred in your name. But there are certain conditions under which you can qualify for this deduction.
For more idea on the Tax deduction on interest , refer our previous discussion. Also, know about the Tax Implications of Quit Claim .
Regards,
Jessica.
My dad has the house mortagage and about 3 yers ago he QC the deed to me and my siblings (7 of us and 3 are minors). In August the mortage company began foreclosure proceedings. We all agreed to QC the deed again in my name only so that I could secure the property. The foreclosing mortgage company has agreed to a selling price, and I have a lender to do the loan, but NOW I find out that our father could not sign the QC deed on behalf of the minor children in order to convey the property to me and that the only way to do so is via a legal guardian authorized by the probate court. Is this true? Are there legal forms or affavidits that would take care of this or do we have to go through court proceedings. In the meantime the foreclsoure auction is scheduled for early Dec. What shall I do?
Hi,
"in order to convey the property to me and that the only way to do so is via a legal guardian authorized by the probate court. Is this true?"
Yes it is true that a guardian will have to be appointed as the law states that minors can receive property title but they can not convey title until they become 18 years old.
Your father had quit claimed the house in name of 7 seven of you, this way the three minors also received the title of the house which legally they can acquire but afterwards your father cannot sign on their behalf.
Thanks
Blue
"in order to convey the property to me and that the only way to do so is via a legal guardian authorized by the probate court. Is this true?"
Yes it is true that a guardian will have to be appointed as the law states that minors can receive property title but they can not convey title until they become 18 years old.
Your father had quit claimed the house in name of 7 seven of you, this way the three minors also received the title of the house which legally they can acquire but afterwards your father cannot sign on their behalf.
Thanks
Blue
Hi,
I agree with Blue, for the transfer of ownership of the 3 minors now, the court will have to appoint an independent guardian to represent them, as minors cannot enter into a legal contract as per law and even as their father you will not be in a position to take decision affecting their ownership rights in the house.
"In the meantime the foreclsoure auction is scheduled for early Dec. What shall I do?"
You should explain this situation to the mortgage company and request them to delay the date fixed for the foreclosure auction. As the situation will get solved as soon as the ownership held by the 3 minors gets transferred.
In my opinion the mortgage company will agree to delay the foreclosure as they normally do not intend to foreclose as long as there is a possibility that the borrower will be able to repay.
Thanks
Colin
I agree with Blue, for the transfer of ownership of the 3 minors now, the court will have to appoint an independent guardian to represent them, as minors cannot enter into a legal contract as per law and even as their father you will not be in a position to take decision affecting their ownership rights in the house.
"In the meantime the foreclsoure auction is scheduled for early Dec. What shall I do?"
You should explain this situation to the mortgage company and request them to delay the date fixed for the foreclosure auction. As the situation will get solved as soon as the ownership held by the 3 minors gets transferred.
In my opinion the mortgage company will agree to delay the foreclosure as they normally do not intend to foreclose as long as there is a possibility that the borrower will be able to repay.
Thanks
Colin
Thank You!! I will contact the mortgage company to request a delay until this process can be taken care of. However, they have delayed it once already, hope they will be willing to do so again. Thanks again
my ex wife passed away, during our divorce i signed over the house with a quick claim deed and the mortgage is in my name..her mother has power of attorney(Not on paper,it was a verbal agreement) will her mother be able to sign it back over to me by just filling out another deed and signing her daughters name on it or will we need a lawyer?
Hi,
Welcome to Mortgagefit forum.
Sorry to hear about the passing away of your ex-wife.
Your ex wife's mother has a verbal power of attorney. But to have any legal affect the power of attorney should be properly made and notarized. With the verbal power of attorney she won't be in a position to take decision regarding her daughter’s property matters.
Let me also tell you that if at the time of death she had given the house to her mother by making a will then she would be able to transfer it in your name if she wishes.
You will have to contact a lawyer in this situation.
Thanks
Blue
Welcome to Mortgagefit forum.
Sorry to hear about the passing away of your ex-wife.
Your ex wife's mother has a verbal power of attorney. But to have any legal affect the power of attorney should be properly made and notarized. With the verbal power of attorney she won't be in a position to take decision regarding her daughter’s property matters.
Let me also tell you that if at the time of death she had given the house to her mother by making a will then she would be able to transfer it in your name if she wishes.
You will have to contact a lawyer in this situation.
Thanks
Blue
Hi Ohio,
Since your ex-wife's mother has only a verbal power of attorney, she is not the legal owner of the property and hence she cannot transfer the it through quit claim, that too, in the name of your ex-wife. She can only covey property to someone provided her name is on the Will made by your ex-wife.
In case, there is no such Will, the court will distribute the property interest through Intestate Succession.
Thanks,
Caron.
Since your ex-wife's mother has only a verbal power of attorney, she is not the legal owner of the property and hence she cannot transfer the it through quit claim, that too, in the name of your ex-wife. She can only covey property to someone provided her name is on the Will made by your ex-wife.
In case, there is no such Will, the court will distribute the property interest through Intestate Succession.
Thanks,
Caron.
my brother purchased a house. i was a cosigner. our plan was for me and my kids to stay with him and help pay the mortgage. plans did not go as i thought. the house is only two years old. i have now moved out and he refuses to pay the mortgage.
i want to do a quit claim deed to say i have nothing to do with the property. what is the best way to go about this? also if i get a quit claim done will i be entitled to pay any outstanding amounts he ows?
i want to do a quit claim deed to say i have nothing to do with the property. what is the best way to go about this? also if i get a quit claim done will i be entitled to pay any outstanding amounts he ows?
My brother purchased a house. I was a cosigner. Our plan was for me and my kids to stay with him and help pay the mortgage. Plans did not go as I thought. The house is only two years old. I have now moved out and he refuses to pay the mortgage.
I want to do a quit claim deed to say I have nothing to do with the property. What is the best way to go about this? Also if I get a quit claim done will I be entitled to pay any outstanding amounts he ows?
I want to do a quit claim deed to say I have nothing to do with the property. What is the best way to go about this? Also if I get a quit claim done will I be entitled to pay any outstanding amounts he ows?