Asked over 2 years ago - Lakewood, OH
FlagMy boyfriend bought a house in 2009 with his father as the co-signer, knowing he would remove his dad's name eventually. We want to take his dad off the trust/deed & add me. I believe we need to file a Quit Claim Deed? What about switching our names on the mortgage, is refinancing a requirement even though my boyfriends name will stay on both the title & mortgage?
Forgive me, but this is a topic that just makes me nuts! I answer questions from parties who are not married and are seeking to get into or out of properties they purchased with a party who is not their spouse and they did not pay attention to the fact that this is a BUSINESS arrangement and requires a partnership agreement. I encourage you to read my Legal Guide on Avvo about this subject or to read my blog at www.ecminchellalaw.com. I am posting the first of two blogs about just this topic. But I digress...
To change title Boyfriend's father needs to quitclaim the property. To get you on to title one of the title holders needs to quitclaim the property into your name, so this transaction may take place in one of the following ways: (1) Father quitclaims his interest to you, or (2) Father quitclaims his interest to Son and Son quitclaims his interest to you and Son. You need to be concerned about the "Due on Sale Clause" of the mortgage, however, because the entire loan might come due if the lender catches wind of this transaction.
The mortgage is a lien against the house. The Note is the obligation to pay. In order to make you an obligor on the Note, you have to have a lender write a new mortgage, i.e. rewrite the mortgage or take out a new one. In that instance, you will not need to be concerned about the Due on Sale Clause, because you will have paid off the mortgage and satisfied the Due on Sale Clause. So, yes, refinancing will be a requirement, unless the lender agrees to the substitution - which in my experience is unlikely.
You should consider drafting a partnership agreement. That is what you are going into - a partnership. This is a business transaction. You need to set forth how you will handle things if you ever decide that you no longer want to live together. Who gets the property? Who gets paid what amount? If you do not do this, you risk a very expensive lawsuit if you break up and do not have a plan for addressing the property.
This answer does not constitute legal advice and does not and is not intended to create an attorney-client relationship. The law may vary depending on the state in which you reside. It is intended only to give some direction in which to seek assistance.
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