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Don't Get Duped by Hidden Mortgage Fees
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You don't need to go through a title company to quitclaim your title to your mother. The deed must include a legal description of the property, usually with its parcel number, and your signature must be notarized so the deed can then be recorded to transfer title to your mother.
DEAR BOB: Our next-door neighbor, Charlie, is about 65 and retired. He is divorced and lives alone. In 1995, he and his then-wife bought the house for $220,000. Today, it is worth about $650,000. His ex-wife is asking that he sell the house so she can receive her half of the profit. Charlie doesn't want to sell the house and move. My wife and I trust him completely and are willing to use our liquid assets to help him stay in his house. We are thinking of buying the house from him for cash and then selling the house back to him. Or perhaps we can lend him the money to pay off the mortgage and buy out his wife's share, with him getting a home-equity line of credit to pay us back. What should we do? -- Ashley S.
DEAR ASHLEY: If Charlie can qualify to get a home-equity line of credit for the amount needed to buy out his ex-wife and pay off the existing mortgage, let him do it on his own. No sense in you getting involved in a potentially messy situation.
If he can't qualify for a new mortgage, perhaps you can buy the house and rent it back to him. That would give you the rental-property tax benefits, and Charlie and his ex-wife could each claim their principal-residence-sale tax exemption, up to $500,000 total. Consult a tax adviser for details.
DEAR BOB: I have heard that some people can have a custom home constructed by a builder and after construction is complete wind up with 50 to 60 percent equity in their new homes. Is this true, and how can I go about doing this? -- Greg H.
DEAR GREG: Hire a quality custom home builder who charges low construction prices. If you already own a building lot, that gives you a head start. There is no guaranteed way to turn a fast profit on new custom homes unless you can lock in a low construction price and market values rise during construction.
Readers with questions should write Robert J. Bruss at 251 Park Rd., Burlingame, Calif. 94010, or contact him via his Web page, http://www.bobbruss.com.
Copyright 2007, Inman News Service
