Question: My husband and I are both on the mortgage and the deed of the house. Can he refinance in his name only if I agree to that? I would like to be off the mortgage and stay on the deed. Is it possible?
Answer: In general, your husband should be able to refinance the property, he can be the person solely responsible for the debt, and you should be able to remain on the title to the home.
In today’s market, refinancing can be a bit tricky with declining home prices, additional lender restrictions and additional lender requirements. If you need to include your income in the application for refinance, you most likely will need to be on title when you refinance and will need to sign the note and mortgage.
If, however, you and your husband can refinance the loan without showing your income, you might be able to have the lender exclude you from the loan and mortgage, but you could still be on title. You might have to waive your rights of homestead to the property and certain marital rights to the home to enable the lender to foreclose on the home should the loan go into default.
You should really talk to a good mortgage lender in your area to go over your financial situation and then to determine if your plan of action would work. By the way, is there a specific reason you want to be off the mortgage? For most married couples, having the husband and wife on the mortgage is not an issue.
Question: I own a rental home. For the last five years, I have rented it out to my youngest son. I have my own principal home and intend to keep it.
Is there another way he can legally purchase the property from me and still be eligible for the $8,000 first-time homebuyer tax credit? Can I transfer the property to a third party through a quit claim deed, which can then sell him the property?
Answer: I’m sorry, but as far as I know, the answer is no, your son won’t qualify for the $8,000 tax credit by purchasing a property that you, his father, own.
The IRS rules specifically state that you cannot buy a home from a parent, grandparent, child, grandchild or parent-in-law.
Your question about transferring the property to a third party is interesting. Let me see if I have it straight: You’re suggesting that you circumvent the homebuyer tax credit law by transferring ownership of the property to someone else, who would then turn around and sell it to your son. Your son would collect the $8,000 first-time homebuyer tax credit, and you would rid yourself of the investment property.
You might want to discuss this issue with a real estate attorney, but it would seem to me that the scheme would run afoul of IRS rules and you could get into trouble for the setup.
Also, in many states, your transfer to another person could be costly, and that person’s transfer to your son could also be costly. Those transfer costs could offset the tax credit or, at the very least, minimize the benefits with great risk to you and your son.
I don’t know for sure, but I think the IRS would frown on such a transfer. I wouldn’t try it.
Question: I purchased a home a year ago. My agent told me that the home was connected to the city sewer system. For the last three months I have had sewer problems. I called a plumber to clean the sewer line, and he told me that my house is hooked to a septic system.
Do you think my Realtor is liable for the repair to the septic system? I have the listing advertisement stating that the home is on the city sewer system.
Answer: Unless you find out that the real estate agent knew the home had a septic system and lied, you probably don’t have much of a case. Most modern real estate agent forms will tell you that the information they give you is not guaranteed.
Having said that, the agent can’t lie to you about this information, and if the agent knew that the home was on a septic system and not the city sewer system, the agent should have disclosed that.
But here’s the big caveat: Agents generally get their information from sellers.
The agent sits down with the seller and completes a questionnaire about the property. In that questionnaire, the seller and the agent list the items that are included in the home and list the other features for the home.
If, in going over that questionnaire, the agent asked the seller about the sewer system and the seller told him that he was on the sewer system, the agent would have fulfilled his duties to obtain the information.
On the other hand, once you looked at the property, it was up to you to make sure you received the seller disclosure document that might be required by law in your state and for you to undertake an inspection of the home.
If you received the seller disclosure report, you should review the form to determine if the seller was obligated to disclose the existence of the septic system. You should also review your real estate contract and determine whether the contract had any representations from the seller to you about the existence of a septic system.
If the seller disclosure form in your state requires the disclosure of the septic system, or the septic system was defective and the seller knew about the defect and should have disclosed the problem to you, you may have a case against the seller.
If the contract has language regarding the septic system and those representations were false, you may have a breach of contract action against the seller. In either case, you might want to talk to an attorney who has experience litigating seller disclosure issues.
Did you have a professional home inspection completed before you purchased the home? If so, the inspector should have gone over the property carefully and discovered that the home wasn’t on the sewer system.
While finding a septic system on some properties may not be easy, septic systems are prevalent in certain parts of the country. Home inspectors in those areas are used to seeing them and generally know what areas are connected to the sewer system.
If you had an inspection, did your inspector say anything about the sewer or septic system? Is there evidence of a septic field at your home? If your property clearly has a septic field, your inspector could have alerted you to the fact that the home was on a septic system. If your inspector was not qualified to inspect the system, the inspector would have told you to get a qualified septic system inspector to
evaluate the system.
Finally, you should find out how much it will cost to repair the septic system. If the cost is minimal and the septic system is otherwise in good shape, you may decide to move on and not pursue the issue further.
But if the cost is high to make the repairs or replace the septic system, you may then have to evaluate whether you have a case against the seller, whether the seller has any ability to pay, and whether it’s worth pursuing the case.
By Ilyce Glink/Tribune Media Services
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