Existing Mortgage Issue

[grneyedtxn]

Hello, I am writing to ask a question about an existing mortgage and hope that someone can help with an answer.

We currently live in my mother-in-laws home for which she has a mortgage on. We pay the monthly mortgage payment and the house will be paid for in 9 more years. We haven't bought the house from her, since it would involve a new
mortgage and the payment would be considerably higher. So, we just live here basically as renters and pay her mortgage. She says in 9 years, when the house is paid
for, she will then sign the house over to us.

We want to use my husbands GI loan to make some major improvements on the house, but because we don't own the house out right, we haven't been able to use it. So my question is...

Would it be possible for my mother-in-law to add my husband as a co-owner now, without it affecting the mortgage in any way? This would allow us (I think) to use his GI loan to make the necessary improvements to the home. If this is
something that is possible, could you maybe advise on the procedure for doing so. Is it something that should be relatively simple to do?

Your advise would be greatly appreciated.

Thank you,
Grneyedtxn

 

[David J. Miller]

You could file a quit-claim deed conveying title from mom to mom and husband. This would put him in title. You should know that most mortgages have a due-on-sale clause that could be triggered when an action is taken such as this. This means the mortgage company could accelerate the loan requiring the entire balance due and payable.

Most mortgage companies do not enforce this and ususally have know whay of knowing it is taken place unless a title search is done. So proceed at your own risk.

There would probably be very little advantage of using your VA eligibility in a situtation like this since presumeably there is a lot of equity in the home and you would most likely not be able to use it since a) mom does not currently have a VA loan and b) she is not a vet and not the spouse of the vet so VA would not allow it. Instead use conventional financing.

There is a way of purchasing this home without having to come up with any down payment and very little in the way of closing costs. If you are interested, post back. I think I've geven you enough information to ponder for one sitting.

 

[grneyedtxn]

Yes Mr. Miller, I would like to hear our alternatives
for purchasing this home as you mentioned.

I am wondering too, if we were to assume the loan on this
house, if the payments we have been making would remain the same or could they increase?

We really have a good thing going here as far as low payments. It is hard to beat $216 a month for any kind
of dwelling. But, of course it is not ours and I am also
nervous that without anything from my mother-in-law in
writing, she can change her mind at any time and decide she wants her house back. I don't think she would do this, since she has said she is giving this house to us, but the possibility is always there. That is why we have not put much money into the home thus far. If we could some how
buy this home and the payments not be affected, it would
allow us to have the extra money for the much needed
improvements.

I thank you for your advise earlier. I am glad you were able to give me an answer. I have been wondering about this for some time. Also, the mother-in-law does not have a Will
which could create problems if she were to die before this
house were paid off and signed over to my husband.

Thanks again for all your help!