Posted on: 28th Jan, 2008 11:59 am
my mom & my dad own a house that value right around $225000 as per appraisal recently. they owed about $194000. i just got married and planning to purchased that house for $225000 and put down $27000. but my mom and my dad decided to do quit claim deed instead under my name and my husband and just give them the $27000 refinance it for $194000 or whatever they owed on it later on after there 5 year contract for fixed rate. is it a good idea to do quit claim deed?
Hi wetseal,
Welcome to the forum.
It is good if your parents quitclaim to you and you just take the mortgage in your name. Talk to the lender and see if he is willing for it. If he doesn't agree with that you can shop for lenders and go fixed rate mortgage.
Feel free to ask if you have any further questions.
Thanks.
Welcome to the forum.
It is good if your parents quitclaim to you and you just take the mortgage in your name. Talk to the lender and see if he is willing for it. If he doesn't agree with that you can shop for lenders and go fixed rate mortgage.
Feel free to ask if you have any further questions.
Thanks.
Hi Wetseal,
I don't see any problems in doing a quitclaim deed. But is your mom aware of the fact that on quitclaim, she may have to pay gift tax? There are exemption limits though.
Your parents insist that you accept their property through a quitclaim, and in return offer them $27,000. I think it's good for you because you don't need to pay as much as $225000. But they do want you to refinance and possibly the lender would also want that in case you parents transfer property to you. So, are you ready to manage a mortgage right now? And what is this 5 year contract? Is this a 5 year ARM?
How much is left for the 5 year to end because after that rates will adjust on a yearly basis and it could get higher. Have you thought of all such consequences?
Usually when anyone takes out a 5 year ARM, he refinances it after the 5 year fixed rate period is over. You will have to know when this period will get over; then either you'll have to pay off the loan entirely or refinance it again.
Hope this helps...
God bless you.
Samantha
I don't see any problems in doing a quitclaim deed. But is your mom aware of the fact that on quitclaim, she may have to pay gift tax? There are exemption limits though.
Your parents insist that you accept their property through a quitclaim, and in return offer them $27,000. I think it's good for you because you don't need to pay as much as $225000. But they do want you to refinance and possibly the lender would also want that in case you parents transfer property to you. So, are you ready to manage a mortgage right now? And what is this 5 year contract? Is this a 5 year ARM?
How much is left for the 5 year to end because after that rates will adjust on a yearly basis and it could get higher. Have you thought of all such consequences?
Usually when anyone takes out a 5 year ARM, he refinances it after the 5 year fixed rate period is over. You will have to know when this period will get over; then either you'll have to pay off the loan entirely or refinance it again.
Hope this helps...
God bless you.
Samantha
