quit claim deed I purchased my first home nearly 3 years ago.

quit claim deed
I purchased my first home nearly 3 years ago. At that time I would recieve a lower interest rate if my parents co- signed. As it turns out we were advised to have my parents ”buy” the home for the lower interest and then switch the paper work or add my name shorlty after for a mere $50 or so. As it turns out we have been told we can not do a claim deed change without paying the taxes on the loan amount of the home. Estimates range from a few thousand up to $15k. My question is this: is there a way to add my name to the title? since I am and have been the only person paying the mortgage on this home. I would like to be able to enjoy the credit benefits of home ownership.

2 thoughts on “quit claim deed I purchased my first home nearly 3 years ago.

  1. Re: quit claim deed
    Mr. Busch is quite right in that the grantors, your parents, would have to pay the excise tax of about 2% of the underlying loan balance as of the date of the transfer to you. But, there are other complications that you could run into, e.g., you would have the title to the house in your name but your parents are on the loan and the lender reports to the IRS that your parents are the parties who get to take the interest deduction and not you unless another arrangement is done on the loan. This situation requires you to see an attorney to get the best advice on this matter.

    Jahnis Abelite
    16710 Smokey Point Blvd., Suite 200
    Arlington, WA 98223-8435

  2. Re: quit claim deed
    As you have found out, if someone gifts interest in property but there is an underlying loan, the county considers the gift as an actual purchase by you — the price paid being the transfer of the loan obligation to you and away from your parents. Excise tax runs between 1-2% of the price paid so you can figure out the approximate tax from there. It varies from county to county. You MAY be able to receive an interest in the property from your parents while keeping them on the loan. However, it really all depends on how the county characterizes the transaction. I don’t really like your chances there. There may be other options but in the end your parents may just have to eat the excise tax (and capital gains tax that may also apply). Otherwise, they could pay it off and then gift it to you. There would be no excise tax but you’d be stuck with the initial basis. You may be best served by seeing a local real estate attorney before taking any additional action. As you can see, making the wrong move can lead to some unanticipated results.

    Bruce Busch
    Bruce R. Busch, Attorney at Law
    6511 39th Ave. NE
    Seattle, WA 98115

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