Hi There,

My Fiancé and I recently purchased a house, and my sister signed on as an occupying co-borrower so that we were able to get a conventional loan, and a great interest rate. Now it would be great to remove her from the Deed, so that we can be eligible for certain tax exemptions, as my Fiancé and I are the only ones actually paying back the loan. Is it possible to remove my sister from the Deed/Tax Bill without changing anything with our Mortgage (aka refinancing etc).

Thanks so much for your time and help,

Jay

It may be possible, but your sister would be an idiot to agree to it. What you're suggesting is that your sister take the risk of having to pay your mortgage, but not get the advantage of ownership in exchange . Further, she would be ineligible to deduct mortgage interest, as her property is no longer at risk of foreclosure for non payment (this is a requirement for deducting mortgage interest). And finally the bank will want to know about the change in deed status - they would make your sister a co-signor on the loan as opposed to a co-owner.

What tax advantages are you currently ineligible for, and which removing your sister from the deed would fix?

Thanks ebaines,

She actually is not deducting mortgage interest, as we are paying everything. She did this as a favor to us to help qualify, and hopefully once we qualify on our own in the future, we will move her off the mortgage as well.

It looks like we would be eligible for more School Tax Relief exemptions, as those just went up a ton in our area. I'm not sure at the moment what other exemptions we would qualify for, but it would be nice to have an accurate income representation for the house, as she makes a lot of money, which throws off the household income.

She actually is not deducting mortgage interest, as we are paying everything.

I understand that. My point was that if for some reason you were unable to continue to pay the mortgage (say, if you and/or your fiancé lost your job) so that your sister had to pay, she wouldn't be able to deduct the interest. So that's a double whammy for her - she has to pay the mortgage and gets no ownership rights, and can't deduct the interest payment.

I'm not sure just relax I'm sure you'll figure it out

Sounds good. Thanks guys. Not too worried about it, just figured I would leave the option open.

Happy Holidays