Expert: Ray Beggs - 7/8/2006

Question
My uncle wants to sell me one of his rental houses. I currently live there and am very interested in purchasing it. We both want to make out on the deal. MY question is, is it possable to add my name on the title and then i can borrow money aginst the house and give it to my uncle, then he can take his name off the title and i can pay the same taxes? What is the best way for a family transaction? Please let me know. Mark

Answer
Hi Mark,

Thanks for the question. You can be put on the title and then get a loan in your name only and then take your uncles name off the house with a grant deed. Here are the 2 problems you may run into:

1) Most lenders require you to be on a deed for at least a year before you can qualify for a "refi" on the property. If you're on it less then a year, then they will consider it a purchase.

2) If you don't/can't qualify for the home on your own, you won't be able to take the uncle off of the loan, only the title. As long as you get the loan as your "sole property" you're okay.

You'll have to talk to a tax professional about any ramifications to your uncle as far as capital gains on the transfer. You'll also have to check with your local county assessor to find out about keeping your uncles tax base. In some counties, it has to be parents to children or siblings to parents to qualify to keep the same tax rate.

Hope this helps and good luck,

Ray