How do we legally buy my parents house and just take over the ramaning payments?
My mom and dad have just purchased a new house just down the road from where they live. The house is much larger for them and suits them a lot better than their current house. My husband and I are going to purchase my parents current house. We all have talked about it and agreed that we would just pay the remaining amount on that house. I need to know how we can get the house in our name but just keep on paying for the house where my parents left off? I would appreciate any helpful answers! Thanks
I fully trust my parents to do everything legal. I am just wanting to know what the process is to make everything legal. We are going to need the house in our name for insurance purposes and other reasons. My parents by no means would ever try to cheat me out of money or a house! They are not sure what the whole process is either. That is why I was asking for some helpful information.
- 1 decade agoFavorite Answer
You need a purchase contract with your parents at a price that will cover their costs plus their remaining mortgage amount. You don't need a realtor so a realtor commission is not factored in. But they will have a share of the title costs, title policy, etc. Talk to a title company for a list of normal fees and who pays what. In different states customary charges to buyers and sellers are different. For example, in Texas it's customary for the seller to pay for most of the new title policy.
With an agreement in hand you can apply for a mortgage. Call a broker and call a bank and discuss what you want to do and they can explain your options. Pick the one whose service level and terms are more satisfactory to you.
Once the new loan is closed the house will be recorded legally in your name and your parents will be free of their current mortgage obligation on that house. As a bonus, your credit will be improved by having a mortgage in your mix of credit trade lines.
This transaction can be done all the way down to a 640 credit score by going with an FHA loan. Some lenders will even allow 620. There are also ways to include some of your costs in the loan since the home will obviously appraise for more than you are buying it for. You could do that transaction for the 3.5% down payment only out-of-pocket if you wanted. This is the part you need to decide with a mortgage loan officer, whether it's with a bank or a broker.Source(s): I'm a mortgage broker licensed in Texas only.
- Anonymous1 decade ago
You can't just simply "take over" their payments. It's a bit more complicated than that unless they want to keep the house in their name and do a lease-option with you or a land contract. However, they would need approval from their lender to do this.
Here is the proper way to do this, you need to draw up a purchase contract between you and your parents for whatever dollar amount the final pay off on their mortgage is. You then can approach their bank to qualify for a mortgage or go to another lender. This is the only option if they want their name off title.
- Anonymous5 years ago
Go see a solicitor - there is a way legally for you to take ownership of the property I just forget what the legal term is now as it has been a while since I worked for Solicitors. It is an agreement putting the property into your name but you are not allowed to sell the property - thereby covering your parents legal rights to ownership. When I worked for Solicitors we processed a lot of these as the Solicitor I worked for used to give free advice one a week at Age Concern Sorry just cannot remember what they call the transfer but any Solicitor would know - good luck
- Anonymous1 decade ago
It is very unlikely that your parents' loan is assumable. You would have to buy the house and obtain a new loan in your name. An alternative is to set up some kind of seller-financed arrangement with your parents if THEY can swing it. Be aware that you will not qualify for a "first time homebuyer" tax credit.
- How do you think about the answers? You can sign in to vote the answer.
- dog maLv 71 decade ago
Legally, you can't. Almost all mortgages these days are written with a due on sale clause, meaning that if the title transfers to anyone else, the full mortgage is due and payable. You will need to go get your own mortgage and pay off mom and dad's.Source(s): Real estate broker
- rob gLv 41 decade ago
you would need to apply and obtain a new mortgage in yours and your partners name to pay off the existing in your parents name. Assuming that your parents have spent their life paying off their mortgage, they will be in negative equity and therefore you will be in a better position with the bank. Applying for a mortgage which is less than the value of the house, will make life a lot easier and will reduce the monthly repayments.
speak to your bank manager and good luck with your (new/old) home.
- T ELv 71 decade ago
first, sign a buy-sell agreement with your parenets to sell the house at the remaining loan balance, and then transfer the house title, and a lawyer is helpful here
2nd, u need to consult to bank to transfer the house loan, or you get a new mortage loan to pay off your parents mortgage
- 4 years ago
I'm interested in this as well
- 1 decade ago
sureley your parents would just sell it to you at whatever the remaining balance is there is no law saying how much you should pay for a house