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Old 09-20-2013, 07:42 AM
 
2 posts, read 2,226 times
Reputation: 10

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Good Morning All,
Simple Question: if i deed my house (mortgage is paid off) to my sister andbrother-in-law, can they then take a HEL against it? Also, is there a waitingperiod before the bank acknowledges there ownership in the house so they canproceed with this option? I’ve been told its 6 months by a local bank but I’mnot sure why. We would like for the ownership to transfer instantaneously inorder to take out a loan. Any help...

Thanks for any help
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Old 09-20-2013, 12:11 PM
 
Location: The Triad (NC)
26,893 posts, read 57,997,675 times
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Quote:
Originally Posted by richie17 View Post
if i deed my house (mortgage is paid off) to my sister and brother-in-law...
Why the extra complication? If for some (usually a wrong headed reason) you're inclined to put
your property at risk or otherwise to lend to family... then just do so.

Get a mortgage or a HELOC in YOUR name on your paid for house and then make a loan of the cash
to your sister and brother-in-law. You might even get the money back someday.
Either way... first step is to see a lawyer. YOUR lawyer.
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Old 09-20-2013, 12:58 PM
 
2 posts, read 2,226 times
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first off thanks for the reply.

the 4 of us are trying to start up a new business together. Recently my wifeand I had to do a short sale on our property which was out of state. With this,our credit took a beating (obviously). Our current home can be used ascollateral to get the financing since it is free and clear. The only stigmawith this house is that my wife and I area associated with it. We have alreadyventured down the home equity loan path, however, we were denied quickly. Thisis why we are trying to get the house in my sisters name. Unfortunately thishome would be viewed as an investing property for them. FHA has issues (whichis understandable) with family to family sales in this circumstance. So imtrying to figure out a way to deed it over to them to get our names off of it.Which in return would open the door for us to use the house as collateral
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Old 09-23-2013, 03:09 PM
 
Location: Phoenix, AZ > Raleigh, NC
14,321 posts, read 17,545,228 times
Reputation: 22170
Here's another HUGE problem with your scenario. GIFT TAX IS DUE when you put the house into someone else's name.

Consult an attorney - your attorney. Consult a CPA - your CPA. Let the sister and husband get their own.

But seriously, this is all a very very bad idea.
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Old 09-25-2013, 08:03 PM
 
9,336 posts, read 11,177,326 times
Reputation: 12521
Quote:
Originally Posted by Jkgourmet View Post
Here's another HUGE problem with your scenario. GIFT TAX IS DUE when you put the house into someone else's name.

Consult an attorney - your attorney. Consult a CPA - your CPA. Let the sister and husband get their own.

But seriously, this is all a very very bad idea.

Yes and no...........1mm lifetime exemption still exists and this could applied towards that.

But that being said, this is a terrible idea. You lose your house if anything goes wrong! Yet your relatives still live in there's if the business fails!

DO NOT DO THIS DEAL!
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Old 10-03-2013, 06:47 AM
 
Location: Southern California
4,350 posts, read 4,944,071 times
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To answer your "simple question" 1) they can take a HEL against it if they find someone to give it to them. 2) The waiting period is defined by the investor because they feel it helps to reduce their risk. Nothing is stopping you from transferring ownership immediately. Finding someone to use that as collateral is a different question. 1) you had a short sale, 2) you house is paid off ; you already know and have worked the system more than most people. If you want to get into a business partnership on the business and property with your sister , that is up to you. It sounds like you want to do a non arms length transaction which most people wont want to touch , but there are people that will do it at higher rates and have different requirement than a standard HEL or HELOC. Are you willing to sell the property to you sister then taking the cash and giving it or loaning it her for the business? You can see how easy it is to do something really bad here which is why banks typically don't want to touch it. Are you planning on completely removing yourself from title?
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Old 10-03-2013, 07:14 AM
 
6,361 posts, read 7,344,952 times
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Quote:
Originally Posted by thelopez2 View Post
Are you planning on completely removing yourself from title?
Are you also planning to move out immediately? Your "simple" question could have some very serious complications. I would strongly advise you to come up with some other plan. You should also get some appropriate legal advice if you're planning to start a business--especially if you're planning to do so with family.
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