Expert: Toni Yates - 5/31/2008

Question
Dear Toni,

Three years ago a friend and I bought a townhouse in northern Virginia. We bought it as an "investment", but the market has since turned. We lived in the house together and she has since gotten married and is moving out of state. Since the value of the home is at what we paid for it and nothing is selling lately, she is considering buying me out. Is there a simple way for her to assume our mortgage (removing me without refinancing) and transferring the title into her name only without incurring all of the settlement fees associated with a regular home sale?

Answer
Hi-
Thanks for your question. Sorry for the delay in answering- I was out of the country. The first step is to contact the mortgage company. Since the mortgage was probably based on both your incomes, most likely they will require a new mortgage (and new closing costs) which I know is not what you want to hear. You may want to try to negotiate with them or tell them you will "shop your loan." Read your small print but I doubt your loan is "assumable." One thing to keep in mind is that you may be the big winners(s) in the long run because of the lower interest rates! Also keep in mind that many lenders can and will waive some of their "costs" if they want the loan. You will also need to file a new deed or quit claim to the old deed but you will have to check with a title company or attorney to give you the costs and legalities. Hope this helps. Best, Toni