Expert: Ray Beggs - 9/27/2006

Question

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Thanks for the question. The way it works is that your dad can quit claim his ownership in the property to you, but he will still be responsible for the loan. The only way to get him off the loan is for you to qualify for a whole new loan on the house. They won't allow a homeowner to transfer the loan to someone else. Check out a local escrow company and they can help you with paperwork.

Best of luck,

Ray

Thanks!  Just one quick follow up and I'll be on my way. Dad's doing this because he's in ill health right now-- if he "quit claim" and continued to pay the loans, and died ten years from now (they'll be paid off in twenty, AFAIK), what do the lendors do?  I'm assuming that since the loan was against the house it doesn't simply vanish. (We have other family members living in the house and Iwant to make certain that the house is protected as to being available for them).  

Answer
Hi Charles,

Yeah, if something happens to the borrowerer, then the loan has to be paid by the estate or the home is sold to cover the loan. You can always get a loan at that time to pay off the bank, but you'll have to be the legal owner of the home.

Take care,

Ray