My husband and I are 60 years old and own a home with a first ans second mortgage. Due to a job loss, our income has declined dramatically. My so has been living with us for the past year, and helping switch expenses. The goal is to eventually sell him the house and move someplace more manageable for us. My question is this. If we do a quitclaim deed adding him as an owner, can he then refinance the first mortgage? If we pay off the second mortgage, can we then deed the property over to him? Thank you.
1 Answer from Attorneys
If you add your son to the deed to the first property via a quitclaim deed , you could trigger a so-called due on sale clause in your mortgage which could cause the lender to make a demand for immediate payoff of whatever remains due on the mortgage balance of this property. Furthermore, such an action could have adverse federal tax consequences for your son at some future time.
I would suggest that you arrange for a consultation with a local attorney who
handles real property law matters and taxes involved with such transfers as you've proposed and who should be able to advise you in greater detail.
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