How to transfer real state property from family member without affecting my ability to buy a house?
The house that I live in is still under my parents name. And my parents have been planning on retiring and moving to their birth country for good. That being, we have been planning on transferring the house to me. However, I'm also planning on purchasing a house in the next few years. Although I've been paying for this house's mortgage payment, like I said, currently it's not under my name so I'm technically still a first time home buyer when I finally get to buy another house. So now my question is how can we transfer the current house to my name while still retaining my status as first time home buyer when I get to buy another house?
I've been researching about it and the answers that I found are mixed... There is a quit claim deed that we can do but, like I said, mixed information in terms of my credit being affected...one statement says that the house will be counted as a mortgage under my name thus affecting my credit and ability to acquire another house (at least making it harder and eliminating the privileges that a first time home buyer may get)...WHILE another says the mortgage can be left in my parents name as long as I'm making the payments for it but transfer the Deed or title of the house to my name. That way my credit won't be affected. Which would be true on this? Or is this even the right way of transferring?
Your help would be much appreciated.
And this is in Las Vegas, NV.
- A HunchLv 76 years ago
If your parents pass the house to you, you will not longer be a first time home owner since you will a home deed in your name. That being said - why does it matter? There are no legitimate first time home owners currently being offered and the ones that were offered in the late 2000s were such a bust no agency with a bit of common sense would re-establish such a program.
Your parents cannot transfer the mortgage to you. This is called assuming the loan and loans have not had assumable clauses for more then 25 years. The only way you would get your parents mortgage in your name is via financing this house.
- Cathi KLv 76 years ago
This is not about credit. A couple of issues here.
1. When the house is deeded to you the mortgage company can call the loan due. You cannot usually take it over anymore.
2. The minute it is deeded over to you then you are a homeowner and not a first time homebuyer.
3. Tax wise it is usually better to inherit. The tax basis of the house is what your parents paid for the home plus qualified closing costs plus improvements. IF they deed the house to you then you get the same tax basis. If tax basis is 50k and you sell it for 400k then the capital gains tax is on 350k. If you live in it 2 of the last 5 years (before the sale) it drops to 100k. If you inherit the house then the tax basis is fair market value. 450k - 450k = 0 and no capital gains taxes.
4. Always see a tax pro before doing things like this.
5.Your parents will have to file a gift tax return. This does not automatically mean they have to pay any taxes but the return must be filed.
- AnonymousLv 66 years ago
I believe you cannot quit claim a property that has a mortgage because the bank owns the deed. They aren't going to give the deed to someone other than the mortgage holder.
You would have to get your own financing.
Also, if the parents give the house to you for much less than market value, it will be seen as a gift. This comes with a tax liability. You should seek the advice of a RE attorney to do everything legally and with the least tax liability.
- realtor.sailorLv 76 years ago
For the most part the posters are correct. For your information there are no special programs for first time home buyers. Some sellers (Fannie Mae and Freddie Mac) do have a restriction that you can't buy one of their homes during the first 15 days they're on the market if you already own a home.Source(s): I'm a Realtor