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Taking Over a Mortgage Loan from Relatives

My relatives have a mortgage loan that I would like to take over (I would like the loan under my name).  Do I need to file a quitclaim deed and title to the property for six months before I take over the loan and refinance?  Is there anything else I should be concerned about?
  • July 11 2012 - San Diego
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Answers (2)

You should first check with the existing lender if the loan is "assumable".  most loans today do not allow this type of take over and will most likely require you to refinance the house to formally put your name on the loan.  during the refinance, you can complete a grant deed to update and change names on title.

by having your name on the loan, you must be able to qualify under all requirements today for the new mortgage.  the other concern is property conveying the title into your name without increasing property taxes.  you must check with your title company and take the appropriate steps to seamlessly take over the loan and property.
  • July 11 2012
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You'll need to be on Title for 12 months.  Or, you may be able to do a "Gift of Equity" Purchase.

Continuity of obligation is met when any one of the following exist:

• At least one borrower is obligated on the new loan who was also a borrower obligated on the existing loan being refinanced.

• The borrower has been on title and residing in the property for at least 12 months and has either paid the mortgage for the last 12 months or can demonstrate a relationship (relative, domestic partner, etc.) with the current obligor.

• The loan being refinanced and the title to the property are in the name of a natural person or a limited liability company (LLC) as long as the borrower was a member of the LLC prior to transfer. Transfer of ownership from a corporation to an individual does not meet the continuity of obligation requirement.

• The borrower has recently inherited, or was legally awarded, the property (divorce, separation, or dissolution of a domestic partnership).
  • July 11 2012
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