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Adding name to parents house deed benefits?

My mother is contemplating adding my name to the house deed. The house deed has 4 names on it: my parents and my uncle/aunt. My uncle got a loan from the house and was unable to pay it back. We all live under one roof so my parents have decided to make the monthly payments by renting out the rooms and paying my uncle/aunt their share of what the house is worth ($600,000). We can't refinance because of my uncle's bad credit. Is there any benefit in adding my name to the house deed? The plan is to take off my aunt/uncle's name and add mine. My mom believes that because I claim "single" on my taxes, this will positively benefit the mortgage somehow? She mentioned something about how the the tax that is taken from my paychecks can go towards the interest on the mortgage payments? I'm unsure about this whole situation so any help would be greatly appreciated. 
  • October 03 2013 - Outer Sunset
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Answers (2)

Profile picture for Hugh Yamada
HI, You need to be careful, your walking into a mine field. You need to talk to your tax professional and title officer. Adding your name to title, won't let you claim the mortgage deduction on your taxes. The only person who can claim it is the person on the loan. And for the property taxes, you have to be filling a Schedule A, to take advantage of this. And by adding your name to title, you maybe jeopardizing your ability to buy a home in the future as a first time home buyer, and take advantage of any programs from the FHA. Good luck, 
  • October 03 2013
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I can offer no opinion of the benefits and/or detriments of putting your name on the title as I have no authority and/or licensure as a tax professional.

However, I can address the mortgage.  If you are on the title, you and your parents can refinance is your names only.  If your uncle and aunt are not on the new loan, the derogatory credit on your uncle's report would not impact a new refinance at all.

Of course, there are all kinds of financial considerations to evaluate for your situation.  Start with a tax professional and/or financial planner.  But, unless there is something missing here, do not assume refinancing is out of the question without consulting a mortgage professional.

All my best,

Deborah
NMLS 279125
WJ Bradley

"We Listen. We Care. We Deliver."
  • October 04 2013
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