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trinab · May 15, 2013, 06:56 AM

Are there new laws regarding adding children to a mortgage when refinancing and what are the consequences if they are added.

smoothy · May 15, 2013, 06:59 AM

If you put them on the deed... they are part owners and when they turn 18 they can force the property to be sold oif they want money to feed their drug addiction ( picking a worst case scenario).

NEVER a smart idea to put kids or friends on the deed... its better to give it to them in a will.

A child can't be on the Mortgage... you have to be an adult to sign a contract... A mortgage is a contract with a financial institution.

LisaB4657 · May 15, 2013, 07:02 AM

If you put a child (I assume you're talking about an adult child) on the mortgage then they become obligated to repay the loan. It will show up on their credit and they will most likely not be able to get a mortgage loan for a home of their own unless they can show enough income to pay back both mortgage loans.

Unless the child has a very substantial income and you need help getting a mortgage loan I can't understand why you would want to add them to the mortgage.

smoothy · May 15, 2013, 09:58 AM

Exactly... and if they are ADULT children and are married and get divorced... their spouse would be entitled to a share of it and could force a partition sale or demand people buy them out of their share... that they invested nothing into.. Even if you are still alive.

But an inheritance is off limits in a divorce.

AK lawyer · May 15, 2013, 05:19 PM

Originally Posted by smoothy

....A mortgage is a contract with a financial institution.

Actually, it's a security interest to secure a mortgage note, which note is the contract to which you refer.

So, if the grown children were to sign the mortgage, any ownership interest they might have in the property would be subject to the mortgage note. But how would the children have an ownership interest anyway? Unless, of course, OP is thinking in terms of the children being OP's potential heirs. Being on the mortgage would not affect that; they would inherit subject to the mortgage anyway. Thus the question doesn't make a lot of sense.

LisaB4657 · May 15, 2013, 05:29 PM

Originally Posted by AK lawyer

Actually, it's a security interest to secure a mortgage note, which note is the contract to which you refer.

So, if the grown children were to sign the mortgage, any ownership interest they might have in the property would be subject to the mortgage note. But how would the children have an ownership interest anyway? Unless, of course, OP is thinking in terms of the children being OP's potential heirs. Being on the mortgage would not affect that; they would inherit subject to the mortgage anyway. Thus the question doesn't make a lot of sense.

As you must have seen by now, many people consider being "put on the mortgage" as being responsible for repayment of the mortgage loan. The OP may have an adult child with a good income who can help the OP qualify for a favorable refinance. So in that situation the question makes a great deal of sense.

AK lawyer · May 15, 2013, 05:54 PM

Originally Posted by LisaB4657

As you must have seen by now, many people consider being "put on the mortgage" as being responsible for repayment of the mortgage loan. ....

Yes, that must be what OP meant. But the question asked had to do with new laws. Sort of a broad question, and depends on the state.

And the other part of the question "what are the consequences ...?", is a head-scratcher too. The adult children would be liable to make the payments, of course. Isn't that obvious?

LisaB4657 · May 15, 2013, 06:01 PM

Originally Posted by AK lawyer

Yes, that must be what OP meant. But the question asked had to do with new laws. Sort of a broad question, and depends on the state.

And the other part of the question "what are the consequences ...?", is a head-scratcher too. The adult children would be liable to make the payments, of course. Isn't that obvious?

Another consequence is that the child's credit will take a huge hit that may prevent them from getting other loans.

joypulv · May 16, 2013, 01:51 AM

Just what 'old laws' do you think have been changed to 'new laws?'

Is this a parent living on a small fixed income, whose child wants to provide his more substantial income as the basis to refinance a higher amount than the original loan?

(Keep in mind that if the elder person on a DEED wants a reverse mortgage at any time, all parties on the deed must be 62+.)