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CalAttorney2
CalAttorney2, Lawyer
Category: Real Estate Law
Satisfied Customers: 10237
Experience:  I am a civil litigation attorney with experience representing HOAs, homeowners, businesses and others in real estate matters.
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My friend has a house in CA with $480K mortgage loan, and

Customer Question

My friend has a house in CA with $480K mortgage loan, and the house current market value is around $650k. My friend is willing to transfer the house to me as a gift, but I need to pay the mortgage every month. He will still living in that house. Dose this doable?
My question is, can he transfer grand deed to me as a gift. By doing this, the house title will under my name but mortgage loan still under his name. I pay mortgage from my bank account every month. If this not work, can I do refinance to have mortgage loan under my name after he transfer grand deed to me. Can we do this by our self and signing an agreement between us or we must hire a title company to do it.
Submitted: 11 months ago.
Category: Real Estate Law
Expert:  CalAttorney2 replied 11 months ago.

Dear Customer,

While your friend can transfer the property to you - doing so is almost certainly going to trigger an "accelleration clause" in his mortgage contract with the lender (his loan will become due in full).

(A lot of people try to transfer property but leave the loan in the seller/donor's name - this is not proper).

You can try contacting his lender and seeing if they will do an "assignment" of the mortgage loan, but you are probably going to be better off getting a new loan for yourself (you will probably get better terms). The lender is going to require you to go through the loan application process, evaluate your income and assets in any event, so you may want to shop around and see what you can find.

Expert:  CalAttorney2 replied 11 months ago.

You can do the transfer yourself (you do not need a title company), but it will help with the transfer of the loan.

(This really isn't a very big expense - the larger expense in a real estate transaction is usually the realtor's and broker's fees - which are based on a percentage of the sale).

Customer: replied 11 months ago.
can he transfer grand deed to me first. Then I do refinance? if I
Expert:  CalAttorney2 replied 11 months ago.

Remember, once he transfers the property - the "acceleration clause" is triggered (he is in breach of the loan agreement, and the property is at risk of foreclosure).

You can do so if you like (meaning it is possible to do), but understand it is risky, and in general it is an unnecessary/foolish risk to take.

Customer: replied 11 months ago.
he need to talk to his bank ask for assignment his loan to me.We need to do loan assignment first or transfer title first or at same time? Does title company handle this transactions.
Expert:  CalAttorney2 replied 11 months ago.

Yes, title companies handle these kinds of matters.

You would be applying with the loan company to take on the assignment of his mortgage.

(I would still suggest shopping around for other competing rates - you will often get a better deal than taking on another person's mortgage, and will run into less complications).

Customer: replied 11 months ago.
What is the process?
we need to find a title company first, to tell the title company our goal.
Then shopping around bank, as my bank talk to his bank to take over the loan under my name.
Then title company transfer grand deed to me.
Expert:  CalAttorney2 replied 11 months ago.

I would recommend starting with looking for funding - that is usually the part of the process that takes the most time.

Once you get financing, you can identify a title company, they will open escrow (which is where your lender will deposit money into the escrow, then the lender will use that to pay off the seller's (your friend's) mortgage, any costs (such as the title company's fee), taxes, and recording fees (this is usually very small, but important)).

The lender will then ensure that the title is transferred and recorded properly for you, and should provide you with title insurance to protect you in the event there is a problem with the title later (such as an unidentified easement claim).

Customer: replied 11 months ago.
Thank You very much!
Expert:  CalAttorney2 replied 11 months ago.

You are welcome, and I do wish you the best with this matter.

Thank you for using our forum, and please do not forget to rate my service so that I can receive credit for assisting you.

If you would like to direct future questions to me specifically, you can do so by starting your new question with "For William B. Esq." and a moderator will notify me.

Thank you again, and again I wish you the best.

Bill

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