On Quit claim deeds

Ol'Man · #1 07-28-2007, 04:19 PM

What is the name of your state? Texas

My son bought property, a home with acreage, 2 years ago. Because of a recent divorce his credit rating was not as good as it should have been but good enought to get financed with a high interest rate loan.

As not enough time has passed for him to rebuild his credit rating to get a refinanced low interest loan I am trying to figure a way to reduce his interest rate and monthly note.

My question: If my son quit claims the property to (in my company name) me, can I refinance it, as I have legal ownership then, at a reasonable interest rate with a mortgage company, (to pay his mortgage off) then my company sell it back to him on a mortgage with the same interest rate.

Any new suggestions on how to do this or the pitfalls that may be encountered will be appreciated.

ThanksWhat is the name of your state?

lcannister · #2 07-28-2007, 09:13 PM

You mean your company is going to hold the note or your son just takes over the note where you refinanced? If the latter the bank may have a thing or two to say and call the entire debt due. Also if the latter he gets none of the tax benefits of owning a home as the interest paid will be reported in YOUR name.

So why after 2 years has his credit rating not improved substantially?

Ol'Man · #3 07-29-2007, 06:42 PM

It has improved, now in the low 600's, but needs to be in the 700's to get a mortgage loan around 6%.

[quote]lso if the latter he gets none of the tax benefits of owning a home as the interest paid will be reported in YOUR name.[Unquote]

[quote]Then my company sell it back to him on a mortgage note with the same interest rate. [Unquote]

That way he gets all the benefits.

If you have any suggestions on a better way to do this, i'll be glad to hear them. Right now his interest rate is 11%. That's just unexceptable. At the time of purchase there were 2 other people trying to finance the property. It was just what he was looking for and figured he could refinance it after a year according to the existing mortgage contract.

Thanks

Ol'Man · #4 08-07-2007, 04:06 AM

It appears no one has any ideas on this or any suggestions.

LindaP777 · #5 08-07-2007, 09:49 AM

We are all hesitating because you are clearly trying to sneak your way around the accepted way to do things, and I certainly don't want to be a party to it. Your best bet is to hire a real estate lawyer and see what agreement he can draw up. You will need him anyway to write up the contracts between your business and your son, so might as well bring the lawyer on board now.

If you get mortgage interest income from the loan to your son, you will have to declare it as income.
You can not put the deed in your sons name as long as you (or your company) have a loan on it - your bank would never approve a mortage loan for you on a house in someone elses name.

Ol'Man · #6 08-08-2007, 04:41 PM

[quote] LindaP777: you are clearly trying to sneak your way around the accepted way to do things [unquote]

And pray tell what is the accepted way to do things ? ? ? All I am trying to do is get his house refinanced at the lowest rate of interest available and the benefits of being a homeowner. Is it a crime to want to know all the answers before you hire a attorney to draw up the paperwork required ? ? ?