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What are creative ways to transfer ownership from inlaws to you, and/or build a home on their land?

In laws own a home which we are interested in transfering ownership to me and my wife.

We would also like to build a new home on their property. Is it correct to assume that I need to transfer the title to my name first before being able to borrow construction loans under my wife and my name? Is it easier to have my in-laws take out a construction loan and put our names on the new construction loan?
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December 18 2008 - Bethesda
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Profile picture for wetdawgs
Please see a tax attorney for tax implications. 
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December 24 2008
You should FIRST contact a lender that specializes in Construction Loans. The restrictions are becoming more tight especially on these types of loans. Do this BEFORE you transfer any title to your name because the requirements and value given to the land will be affected by whether you currently own the land and have the title in your name.

There are tax implications for all of this as well, so you should ask your attorney or accountant for advice since this is a parent/child transfer and it may be more beneficial to have it in the parents name until death and have it transfer, or else have both parties with rights of survivorship, but these are best answered by your financial advisor/attorney/accountant.


If you're not worried about any of this, and they just want to give you the land, a simple "Quit Claim Deed" can be prepared by an attorney for minimal cost. 


If you need some referrals to lenders who are still doing construction loans, feel free to contact me.


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December 19 2008
Profile picture for coffebrk
Transferring ownership is easily done. If the property is owned free&clear both parties can go to a Title insurance company. They have experience doing these types of transactions. If this is considered a gift which it sounds like based on your description, then there are IRS forms that have to be completed to register the gift. There are also transfer taxes that must be reconciled based on where the property is located.
I would consult with a financial expert to make sure this doesn't come back to hurt you and your family financially.
The construction loan is a problem the way you want to do it. You can't just have your name put on a loan that a relative is approved for. This needs to be discussed with a mortgage specialist to determine the best way to proceed.  You do not give enough details.
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December 19 2008
Profile picture for jzparker
You should have them transfer the title to you as soon as possible.  Depending on your situation, there are a number of things that may affect your ability to get a loan.  Namely, the length of time that you are on title to the property can have a big effect on your ability to get a loan.  To get the best deal, you need to be on title for at least one year.  I do not suggest putting your in-laws on a construction loan because it will be difficult to remove them and more expensive to remove them from title later on.  I have experience with this and also with construction loans.  Feel free to ask any other questions.
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December 19 2008
 
Related Questions
What are creative ways to transfer ownership from inlaws to you, and/or build a home on their land?
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Latest answer by wetdawgs
December 24 2008 | 4 answers
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