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Chrislr1017

Transferring Property Deed to Family When I have a mortgage

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I purchased a home for my daughter; I have a mortgage on the property and she makes the payment each month.

The home is currently non-owner occupied;  I called the bank to see if I could sell the home on a land contract and keep my current mortgage in place.  I was told no.  If the home was owner occupied, the property taxes could be under a homestead and less expensive which would mean more of their payments would go to principal instead of escrow.  Would it be legal for me to just Quit Claim the house to her and leave my mortgage in place?  In doing this, there would be no re-finance and she could homestead the property to reduce the property taxes.  

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There is no law against it, so it would not be illegal.  But it may violate the terms of the mortgage allowing the lender to call the loan due.  Have a real estate lawyer look at the mortgage to see if there will be any problem.

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Would it be legal for me to just Quit Claim the house to her and leave my mortgage in place?

 

Legal?  Yes.  However, it might violate the mortgage/loan agreement.  It might also be a really bad idea because you'll remain liable on the mortgage but no longer have any interest in the property.

 

The best thing to do would be for your daughter to refinance in her name only and you to transfer the property to her as part of that process.  If she's not able to refi in her own name because her credit or financial situation isn't good enough, then it probably would be very foolish for you to give up your ownership of the property.

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