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If owner, or partial owner, is not on the mortgage, at closing they would have to agree that the mortgage lender would have the right to the property if the mortgage holder forfeits.
Had this with my DH. His name was not on the mortgage but he owned the house. He essentially agreed in writing at closing that his property was collateral for my loan. Not all mortgage providers will agree to this.
It is standard practice to have all owners sign the lender's Deed of Trust, the legal document that pledges the property as collateral. Or if in a community property state, they must do the same. A buyer can always deed over his interest after the loan closes, but if done without the lender's participation, that lender still can claim interest in the property.
We see many want to put homes in the name of the LLC or a Trust. There is a way to do this upfront and with the lenders approval of the LLC or Trust, but this costs money, sometimes $1000+. But there is also an easy work-around. Lenders will agree to the work-around because it does not interfere with their ability to foreclose. What happens after their loan closes rarely bumps them out of first lien position. (Except for IRS and taxes). Years (decades) ago we had a borrower deed his house over to his dog (dog had a human name).......it was a good laugh but stopped nothing.
I can't help you with regards to Texas' Homestead exemption, but have your wife sign a quitclaim deed on the property for your mother and then be sure to record it (most likely with the county).
It is standard practice to have all owners sign the lender's Deed of Trust, the legal document that pledges the property as collateral. Or if in a community property state, they must do the same. A buyer can always deed over his interest after the loan closes, but if done without the lender's participation, that lender still can claim interest in the property.
It may be "Standard practice, but it doesn't HAVE to be that way. We bought two homes, and re-fi's on them. The name on the mortgages was mine, DH signed a quit claim and wasn't on the mortgage or deed. Yes, it was a community property state.
I want to purchase a house for my mom, I would be getting the loan and paying the mortgage but the house would be hers, as in I want her name on the deed. Can this be done? Or would I have to be on the contract in order to close on the loan and thusly on the deed? I guess if I have to be on the contract and the property would be deeded to me, could I perhaps still keep the loan and just put someone else's name on the deed later... how would that work with the bank's lien on the property?_?
Does this make sense? Further reason to have it in her name, aside from general wanting one's name on the homes in which they live, is over 65 & homestead exemptions (for her), I'm married (we're in Texas) so there's the whole community property aspect if it's in my name.
Any thoughts?
I believe you can have both names on the deed and only yours on the mortgage and still qualify for the over 65 as far as taxes go, all without gift tax involved since your name is on the deed. Without your name on the deed a gift tax would probably result. I don't know if a bank would require both names on the mortgage or not but worth looking into but that shouldn't preclude you from paying the mortgage anyway. I don't know if you have siblings but from a estate point having your name on the deed should mean it avoids probate and goes automatically to you if your mom dies. Contact a real estate attorney for setting this up to avoid any problems.
I believe you can have both names on the deed and only yours on the mortgage and still qualify for the over 65 as far as taxes go, all without gift tax involved since your name is on the deed. Without your name on the deed a gift tax would probably result. I don't know if a bank would require both names on the mortgage or not but worth looking into but that shouldn't preclude you from paying the mortgage anyway. I don't know if you have siblings but from a estate point having your name on the deed should mean it avoids probate and goes automatically to you if your mom dies. Contact a real estate attorney for setting this up to avoid any problems.
Even if a gift, the gift tax is easy to avoid by declaring it as part of the lifetime exclusion.
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