Posted on: 27th Nov, 2007 01:48 pm
i purchased a v.a (repo) property in 2002. to strenghten my debt/income position viewed by va, a friend agreed to be co-borrower on the loan. both of our names are on the deed as recorded at register of deeds (state of nc, cumberland county). we are both also members of the same church and decided shortly after purchasing the property that we will give it to the church. the church has used the property as rental property, and currently using it to housed revival speakers, etc; and as a weekend get-away for members. the v.a mortgage is in my name with one of the nations big mortgage company. the church has paid the mortgage almost from the beginning, and we are now at the point where we need to deed the property completely over to the church ... and possibly pursue property tax exemption status which amounts to approx. $1,100 (county) - yearly. what is the best way to go about this??? quit deed? will the mortgage company accept this? and what about the property tax escrow required to be paid in the monthly mortgage? if religious tax exempt status granted, then how will we go about it???
thanks,
mario
thanks,
mario
Look for a 'due on sale' clause or acceleration clause.
It stipulates that the borrower will need to pay the note in full if the title is transferred to another party. It's likely that this clause comes with VA/FHA loans.
I wouldnt recommend doing this....I would recommend having the church finance the home in their name. Once the title passes over to their name...and they pay late ONCE...then YOU will be responsible.
My mother taught me one thing about the church.....you may have a different pastor....or different board members ..... they may not have the same ideas as the original parties that you agreed with.
Also, VA is strict on rental properties.......
It stipulates that the borrower will need to pay the note in full if the title is transferred to another party. It's likely that this clause comes with VA/FHA loans.
I wouldnt recommend doing this....I would recommend having the church finance the home in their name. Once the title passes over to their name...and they pay late ONCE...then YOU will be responsible.
My mother taught me one thing about the church.....you may have a different pastor....or different board members ..... they may not have the same ideas as the original parties that you agreed with.
Also, VA is strict on rental properties.......
Thanks for the insight. You are correct about the clause mentioned. It is stated very clearly. I'll make the recommendation to the board members to purchase the property out-right/secure their financing, etc.
Thanks again,
MC
Thanks again,
MC
hi rsmcogic,
welcome to this forum.
i fully agree with banker0679. if you quitclaim the property to the church, the mortgage company may claim the due mortgage in full under 'due on sale' clause or acceleration clause. so before signing the quitclaim deed, you should consult with the mortgage company. and see if the church can refinance the loan and remove your name from the mortgage before you sign the quitclaim deed.
"what about the property tax escrow required to be paid in the monthly mortgage?" your concept is not clear here. after the refinance it is the duty of the church to pay the tax and you will get a mortgage release. whatever the tax exemption will be, the church will get it.
thanks,
larry
welcome to this forum.
i fully agree with banker0679. if you quitclaim the property to the church, the mortgage company may claim the due mortgage in full under 'due on sale' clause or acceleration clause. so before signing the quitclaim deed, you should consult with the mortgage company. and see if the church can refinance the loan and remove your name from the mortgage before you sign the quitclaim deed.
"what about the property tax escrow required to be paid in the monthly mortgage?" your concept is not clear here. after the refinance it is the duty of the church to pay the tax and you will get a mortgage release. whatever the tax exemption will be, the church will get it.
thanks,
larry