Gifting House to Bro?
This might be an odd one and I am talking to banks and lawyers, but thought someone here may be able to help. I have a house out of state that my younger brother has been living in for over 10 years. I would like to give him this house. This would consist of him…
This might be an odd one and I am talking to banks and lawyers, but thought someone here may be able to help. I have a house out of state that my younger brother has been living in for over 10 years. I would like to give him this house. This would consist of him taking over the payments of my 1st mortgage and Equity Line of Credit on the property – which he has in effect been paying in rent for years. I’m open to keeping the mortgages in my name if we can also get his name on them and the title, or any other ideas. He is younger and has just begun creating a credit history so his score is not good (not sure exactly and will find out but last I knew it was not good enough to get him a refinance in his name alone). If it matters both the 1st and Equity LOC are around 100K for a total owed on the property of about 200K. An appraisal would put the value between 210K-250K. Does anyone know of a way to do this?
Thank you all!
that’s so nice of you to want to gift the house! that said, i thought JTWROS was just for securities accounts? Like a shared brokerage account? That’s what we did when I was managing money for a family member.
cmu – we didn’t have that experience in NYC. Our mortgage was with Astoria Federal. Our lawyer handled the whole transaction.
Don’t know if this is NYC (since it was not so in SF) but ANY change to title invalidates the mortgage and you’ll have to refi with the new names (I’m doing a TIC right now and was told that yesterday.)
SenatorStreet is that right? Could the brother claim ownership also?
Our situation was kinda sorta similar. We had bad credit but decent income. My dad “bought” the house for us and the mortgage was in his name but we made all the payments. He then “sold” the house to us for $1 and we did a change of title. After a couple of years, we were able to get a mortgage in our own names by showing the bank that we were the ones who had made all the payments (I think we had two years of steady, ontime payment history). As for deducting mortgage interest, we were allowed to take the deduction even though mortgage was in my dad’s name. Our accountant cross referenced his social security number on our return so the IRS could see that the deduction was not being claimed twice.
I think that might be all it takes, SS but I’d get an accountant’s advice
Your brother could claim the tax deductability as he has the cancelled checks to prove that he made the payments.
Typically, as long as it remains in your name (alone or not) and the payments are made, it shouldn’t have any effect. I’d ask an accountant as to how to work it out so that you can split the deductability of the interest or he can deduct it. Not sure if that’s at all possible with you receiving the 1099 and not him, unless you work out an approprite deal between the two of you that would account for it. In other words, you take the 1099 deduction and essentially pay him cash for it.
You don’t want to have to refinance unless you have some super high rate now (or an adjustable). It’s too difficult n environment.
Thanks Dave! I’ll look into that… do you know how that would effect mortgages?