Posted on: 20th Jul, 2007 08:47 pm
my father has had major financial difficulty throughout his life. 10 years ago he and his wife were living in a filthy motel room, because thats all they could afford. their credit score was probably negative as he's had past issues with the irs (not sure if fixed, but i believe why he isn't able to get a job w/o them garnishing his wages). he has been able to scrape by and i helped them out by buying a house and securing the mortgage and title in my name alone. i knew i could always end up selling the property if they weren't able to make payments as my security and could use the mortgage interest deduction on my returns. the deal was within 2 years he would be able to payoff the entire mortgage (by selling off some business interests) and i would transfer the house to them. well 10 years later that hasn't happened and i've even had to dig into my savings to help w/payments periodically. fortunately the property has gone up in value and has lots of equity. my relationship with my dad has suffered over the years and he thinks he did me a favor. anyways he is so concerned i'm trying to steal his house (technically mine by all means). i would love nothing more than to just rid myself of this sore thumb and relieve myself of this responsibility. unfortunately he doesn't want to move. he is trying to have me sign a quit claim deed, but i've explained to him that there will be tax implications and how is he going to find a mortgage company that will allow him to finance as the quit claim deed would leave the financial responsibility and mortgage in my name as my debt. any suggestions? i'd want to know my full implications regarding capital gains taxes, make sure my name is removed on all debt, and receive money owed to me before i'd ever sign the property over. is this possible utilizing a quit claim deed? i know this sounds complicated, but i'd hate to be in a position where i have to sell and put him on the streets, because he can't make monthly payments. he now receives minimal social security and the payment is less than $800 a month and he wants to refinance so he can save some money.
Welcome Shuuu.
I appreciate your concerns and worries towards your father. It's a good decision on your part to leave away the property to your parents.
When you sign over a quitclaim, you will be transferring your rights on the property to your parents. And, as far as tax implications are there, it will be your responsibility again as you are the one giving it away. However, it will depend; if you transfer a property at a price less than it is worth or at no price at all, then it is considered as a gift. And, the taxes you pay are the gift taxes though there are some exemption limits. Know more...
For removing your name off the debt, a quitclaim won't work out. Then you ill have to get the loan refinanced in the name of your parents. If you can get the money from your parents - the entire payment on the loan and then quitclaim, then that's a different issue. You pay the money, obtain a mortgage release certificate from the lender and then quitclaim your property to your parents.
Thanks.
I appreciate your concerns and worries towards your father. It's a good decision on your part to leave away the property to your parents.
When you sign over a quitclaim, you will be transferring your rights on the property to your parents. And, as far as tax implications are there, it will be your responsibility again as you are the one giving it away. However, it will depend; if you transfer a property at a price less than it is worth or at no price at all, then it is considered as a gift. And, the taxes you pay are the gift taxes though there are some exemption limits. Know more...
For removing your name off the debt, a quitclaim won't work out. Then you ill have to get the loan refinanced in the name of your parents. If you can get the money from your parents - the entire payment on the loan and then quitclaim, then that's a different issue. You pay the money, obtain a mortgage release certificate from the lender and then quitclaim your property to your parents.
Thanks.
Hi Shuuu,
Welcome to Mortgagefit discussion board.
I read the complete post and can only say that you do not quit claim the house to him right now. As it stands, your father won't be able to refinance the mortgage in his name due to bad credit and less income. You will have to continue making the payments without any rights over the house.
Regarding your second post about taxes, if you quit claim the house, it will be a taxable gift if the house is quit claimed for a value less than its present value. It means you have probable tax implications as you intend to quit claim the house for a value less than its present value which is now twice to what it was when you had purchased it. You can read more about tax implications from - http://www.mortgagefit.com/discuss/quitclaim-taximplications.html
One thing I'd be interested in knowing from you is, what is your father's age? If it is 62 or more then have you considered a reverse mortgage as an option to look at? The house has enough equity by which existing mortgage can be paid off if they can qualify for a reverse mortgage.
Thanks
Blue
Welcome to Mortgagefit discussion board.
I read the complete post and can only say that you do not quit claim the house to him right now. As it stands, your father won't be able to refinance the mortgage in his name due to bad credit and less income. You will have to continue making the payments without any rights over the house.
Regarding your second post about taxes, if you quit claim the house, it will be a taxable gift if the house is quit claimed for a value less than its present value. It means you have probable tax implications as you intend to quit claim the house for a value less than its present value which is now twice to what it was when you had purchased it. You can read more about tax implications from - http://www.mortgagefit.com/discuss/quitclaim-taximplications.html
One thing I'd be interested in knowing from you is, what is your father's age? If it is 62 or more then have you considered a reverse mortgage as an option to look at? The house has enough equity by which existing mortgage can be paid off if they can qualify for a reverse mortgage.
Thanks
Blue