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capgirl49 · Dec 8, 2011, 10:52 AM

My sister owns a house in Oregon with a lot of equity but way too much debt. She is also carrying huge personal credit card debt. She rents a room to my father who at 95yrs is cogent. Has a sizebable bank acct as well as a navy pension and has great credit. He has recently helped pay her property taxes and now believes it would be in both their best interests to sign her house over to him so he could write off the taxable interest on HIS taxes. She has refi-ed the house twice.

Is this even feasible? What type of costs would be incurred with transfer of title. Where would they start? By speaking to a title company?

joypulv · Dec 8, 2011, 11:24 AM

Although this might have some merit, it won't last past his lifetime so the problem will just be back when she inherits her house back from him. There is also the looming matter of his health care if he should need extensive home care or be in a nursing home, and they will take as much of his assets as they need at very high rates. And he can't just sign the house back over to her, because the state looks at home ownership back 5 years (I think it's 5 now).
She is much better advised to consult a good financial advisor (maybe he could pay for that). You say she has a lot of equity but a lot of debt and that sounds contradictory. The value of the house and all her debts, his assets, her income, his income - too much to go over in detail here.

He might want to give each of his children the max allowed as gifts each year (I think it's 13K). She should use hers to pay her credit card debt FIRST. If he pays her prop tax in addition to rent, he can change his will to stipulate a decreasing bequest to her. In fact he could pay all her debts and take it out of her inheritance. But it sounds like she might have a problem managing money and that needs to be addressed too.

Fr_Chuck · Dec 8, 2011, 02:36 PM

She will have to "sell" the house to him and he will have to refi the loan in his name. You can not just transfer the house, with the loan in her name.

ScottGem · Dec 8, 2011, 02:53 PM

Originally Posted by capgirl49

My sister owns a house in Oregon with alot of equity but way too much debt.

This is a contradiction of terms. Equity is the difference between the value of a property and the amount owed on it. If she has equity, then the property doesn't have too much debt.

In any event, she has to sell the property. The lender will not approve a change of ownership unless all loans are paid.