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raj1son1 · Sep 19, 2008, 08:09 AM

I live in CA and have a property bought for 250K. I put down 50K. My loan is fully amortised and I am paying payment of 1330/month + taxes etc. I want to move to another place and one of my family member wants to buy the property. They do not have enough down to buy it but they can give me 20K down and then start making payments of the current mortgage and gradually will have enough to take care of the rest of the down. I believe in them. Can I transfer the property to them or add their name to the ownership w/o letting lender know. Does all the lender care about the payments on the mortgage or they have control over ownership changes also? I mean kan I "A" add "B" to the title of the property and let "B" make payments of the mortgage?
Thanks

JudyKayTee · Sep 19, 2008, 08:14 AM

Originally Posted by raj1son1

I live in CA and have a property bought for 250K. I put down 50K. My loan is fully amortised and I am paying payment of 1330/month + taxes etc. I want to move to another place and one of my family member wants to buy the property. They do not have enough down to buy it but they can give me 20K down and then start making payments of the current mortgage and gradually will have enough to take care of the rest of the down. I believe in them. Can I transfer the property to them or add their name to the ownership w/o letting lender know. Does all the lender care about the payments on the mortgage or they have control over ownership changes also? I mean kan I "A" add "B" to the title of the property and let "B" make payments of the mortgage?
Thanks

If you change the names on the title without notifying the mortgage company they can "pull" the mortgage - will they do that in this economy? I don't know.

Many mortgage companies will allow someone to assume the mortgage without a problem.

Your mortgage documents should contain language about assigning/assuming the mortgage.

smearcase · Sep 19, 2008, 08:19 AM

You might be able to create an agreement between you and he that he pays the mortgage but the bank will still hold you totally responsible. The agreement would probably be in violation of your mortgage agreement if you read the fine print. I don't believe anything official could be done without notification and approval by the bank. It is great that you have faith in your relative but you are getting into a very risky venture in this day and age.

rockinmommy · Sep 19, 2008, 08:57 AM

I agree with the 2 previous posters.

Almost all mortgages contain a "due on sale" clause. Check yours to be sure. What that means is any change in title to the property can result in them immediately calling the note due. On performing mortgages, meaning the payments are current, I've never heard of it happening.

If you do it without adding them to the title - like a contract for deed - you would continue making the mortgage payments, while they just pay you. Personally, as long as my name is on the mortgage that's the only way I would do it.

You can approach the lender about the possibility of the new buyer assuming your mortgage, but it's unlikely. They would most likely just want the new buyer to obtain their own, new loan.

Even though it's family - well, especially because it's family - I'd recommend having a real estate attorney draw up the necessary documents. That way both sides are covered, buyer and seller. Each of you will have too much money invested to not do this by the book. We see posts on here every day of transactions that start friendly (friends, family, whatever) and before you know it, it's a mess.