Can I take over parents loan payments?

8 Replies

Hello All,

    I have a situation that seems to have presented itself that should be mutually beneficial to both my parents and I.   My mother had retired years ago and moved into a smaller house.  My brother, his girlfriend and her kids were living in her old house and started out paying some rent, but you know how it can go with family.  Anyway, fast forward a few years and her father had moved in with them under hard times and now everyone basically staying rent free while working and my mom paying for it is retired... doesn't seem right..

   My mom, fed up with the situation gave my brother a chance to buy the property what she had left on the mortgage. Property is worth about $175K in current condition and she wants 125K cover mortgage. My brother has for some reason turned it down.  Wanting to be fair, my mother has offered me the same deal.  The house does need some work to get it up to date and would be worth over 200K updated.  I have decided that it was too good a deal to pass up and with my construction background, I should be able make some money while getting mom out of her situation. 

  Now to the logistics.  I have 730 credit score.  I am self employed and as most do, I reduce my income as much as legally possible to avoid paying excess taxes.  I also had a lapse in work about from mid 2012-thru to start of 2014 because I wouldn't sign a no-compete clause, but now have been working extra cause nobody else can do the work cause they had signed that contract.  So between these 2 factor, I am no sure I will be able to get a mortgage in my own name at this time.  My mother has said she would do whatever she could to help.  We just don't know what our options are?  We have discussed either her co-signing for new mortgage, maybe adding me to current mortgage?, or keeping in her name and having me make payments while I fix it up and sell it (tax issues). 

  Anyway,  I'd really love some input from some of you whom have been in a similar situation. 

 thank you 

Jason

That wasn't a question is was a short story, LOL.

You mentioned a 125 mortgage, I assume that is existing. Don't rock the boat on this, just make the payments for her, several ways to do that. Just have her get any permits that might be required and fix it up.

When you're ready to sell, she can quit claim the property to you, prior to closing, you sell with your buyer in contract and close it conventionally, paying off her mortgage. Check with her tax guy as to any gifting of the property. Good luck :)

I agree with Bill. Don't rock the boat too much with the existing mortgage and take over her payments. Check with the bank/ mortgage company to see if you can add your name to the note and take your mothers name off the note. That way she has the peace of mind of being done with her problem and you have the peace of mind knowing that when you sell and realize that big profit your mother doesn't change her mind and collect the profit. If her name is on the mortgage legally she could do that. Not saying your mother would do that but when money is involved unexpected things can happen. Best of luck to you.

Yes Bill, it was a short story. LOL I tend to get a little winded, but I figured why leave out details that could create better understanding and advice.  Thanks for reading it all ;-)

Thanks a lot for your quick responses and sound advice.  I was hoping that it could be this simple.  We didn't want to have to go through the whole mortgage application process. 

I understand things can happen when money is involved.  We both fully trust each other. @Bill Gulley Would you recommend even talking to the bank at all about the note?  I'm thinking even this maybe too much rocking the boat?

thanks again

Jason Jochem 

RUN!  Are you kidding?  Not enough return in the world to get me into this reality show of toxic drama.  Your kind mother is an enabler.  The kids and their kids and the father or whatever need to move.  Only if you have the spine to evict them, consider doing this.  You will probably never speak to them again at best.  I'd stay out of it @Jason Jochem .

 Thanks for that advice as well.   She has said, "I'd make a terrible landlord"  She is way to kind-bless her heart.  As soon as my brother turned down the offer a few months ago; we began the process of getting them out.   It took a little longer to get them out then I would have liked, but the house is now open and ready to go!  No hard feeling between my brother and I - maybe his girlfriend doesn't like me too much right now, but what are you gonna do. @Steve Vaughan

Oh whew!  Different story, then.  Sorry I missed that they are already gone.   I hope you understand being an enabler is not an insult. I have been guilty of the same.  How I let folks get months behind is beyond my wife's comprehension. I get where she is coming from.   

If it were me, I would just make the payments and not contact the bank first.  Sometimes asking for forgiveness is better than asking permission!

I must have left that detail out in the story.  I completely understand and took no offense.  I've been guilty of being an enabler in my past as well and learned some tough lessons because of it.  I appreciate the advice from all of you.  Thanks again.  Have a good day.

No, no need to get the bank involved in your family business, you don't need to refi or purchase, just follow what I mentioned. Steve might be a little tough, LOL.....I don't advise in family matters. :)