Expert: Jim Root - 11/11/2007

Question
Hi Jim,
  My sister obtained the loan for my house while I was going through a divorce.  The down payment was mine, and I have made all the payments. How can I put it back into my name now that won't be so expensive? Can she just sign over the title to me? Is there some special laws for transferring to a family member?

Answer
Hi Anne--

Probably the only way for you to become the "legal owner" of the Home is for you to "purchase" it from your Sister! It is unlikely that the Lender who now "owns" the Mortgage will relieve her of her responsibility for the loan & make you liable unless you can now fully qualify & be approved for a loan "on your own!" If your Income-to-Debt Ratio, Credit Scores, etc. are now acceptable, this might be the "way to go!" You should check with the Lender on whether or not this can be done--and if so, what costs to you & your Sister would be involved.(Title work, Appraisal, Credit Report,Loan  Origination/Processing & Underwriting Fees etc?)If you can be approved for a loan, your Sister could "gift" you the equity in the Home & this can  serve as "Downpayment," while other costs may be included in the "Sale Price" &/or loan amount.(Also, if you can be approved "on your own," and the existing loan is "Assumable," you could just assume the existing loan & this would allow a continuation of the current rate/terms. Or, perhaps the Lender would do a Refi for your Sister & add your name to hers on the new Mortgage.)

If "none of the above" will work for you, you might consider a "Quitclaim Deed." This is a form of conveyance in which any rights & interest that the grantor has in a property is conveyed to the grantee without warranty or guarantee of title!(This is a "Dictionary Definition," and you should check this out with an Attorney) With a "Quitclaim," your Sister could transfer any "rights & interests" she might have in the home to you--but she'd remain on the Mortgage & "legally responsible" for monthly payments, taxes, insurance, routine maintenance, etc. (Again, as I'm not a Lawyer, you should check this option out with an Attorney; you'll need one to prepare & record a "Quitclaim Deed" anyway, if you decide to "go that route!")

As far as I know, there are no "special laws for transferring (real estate ownership)to (another) family member." At least not in  any of the many States I've worked in--but your State may have something I don't know about--so contact a local Real Estate Lawyer & get legal advice from him/her on this matter. Before that, though, I'd suggest you check with your Sister's Lender about what they can do for you!If the Lender can't or won't help you out, then you need the Lawyer! Hope this helps , Anne Good Luck!--JIM