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I’m planning on moving into my mother’s house and she is moving out.If I take over my mother’s home equity payments on her home; without getting the loan in my name, does my name have to be on the deed? I would like to make the loan payments to her until next year my financial situation will greatly improve. At that time, I would like to apply to take over the remainder of the loan with the bank. If something, God forbid, should happen to her in that year, could I keep the house as long as I kept paying the loan every month?
I’m not interested in doing a land contract.
Ok, what I meant when I said that I was going to assume her loan, is that I’m going to get my own loan to pay off her loan. But, what about the deed? Does being on that give me any rights? I’m not trying to be sneaky about this. My mom and I are in agreement. It just seems easier this way. She cannot handle the house and the property taxes anymore and I want to live in the house, but I’m not eligible for much of a mortgage yet. I’m going to pay everything pertaining to the house.

4 Thoughts on Taking over mortgage payments?
  1. Reply
    Simpson G
    February 13, 2014 at 9:35 am

    What you are planning to do could turn into a nightmare. You are not taking over the mortgage or HELOC payments; you are paying your mother rent. You have no legal standing regarding ownership of the house or responsibility of the mortgage/HELOC.

    Most banks do not have assumable loans, which means that if you want to “take over the loan”, your mother will have to refinance and add you to the loan or you will have to buy the house outright and you will have to take out a new loan.

    Should your mother die during that year, the house will go into probate and will go to whomever it is willed to, AFTER the estate’s debts are settled. This is a extremely valid concern and you are wise to have that forethought. To retain ownership of the house, you would either have to pay off the mortgage outright (assuming the house was willed to you alone) or you would have to get a new loan that pays off your mother’s now defunct mortgage. If the house is worth less than is owed on the mortgage, you could be in serious trouble with trying to get a loan.

  2. Reply
    Appraiser guy
    February 13, 2014 at 10:11 am

    You can not assume a Mtg loan they do not do that, you must get your own loan and pay off your mothers loan.

  3. Reply
    someone
    February 13, 2014 at 10:20 am

    Mortgages and any loans cannot be assumed. They must be paid in full so find your own financing.

  4. Reply
    Vincent
    February 13, 2014 at 10:53 am

    My colleagues are citing a common misconception. That banks do not allow loans to be assumed as there is a clause in almost all agreements that should the property change hands the loan will be called due and payable. First of all, the clause does not say this. Instead it says that the lender “may” call the loan due. In reality this clause is rarely enforced if the new party is paying the loan on time and continues to pay. Especially in this time of high foreclosures and missed payments.

    But as said if you pay your Mom and your Mom pays the bank you will likely be looked at as a renter.

    You may want to explore the financing concept of “subject to”. It is a way of assuming another’s loan. Yes, there is a possibility of it being called but so far that chance is extremely small.

    Best wishes.

    Steele

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