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Lucy, Esq.
Lucy, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 29312
Experience:  JA Mentor
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I live in Massachusetts. My father in law secured a loan and

Customer Question

I live in Massachusetts.
My father in law Kevin secured a loan and bought a house for me and my wife and the kids to live in and buy.
The loan by Kevin's name but
I am making all the payments on the house.
We agreed that me and the wife will make all the financial payment on the house and eventually we will own it.
I paid 1000 earnest money
Also before closing I paid 4000 and a wrote a gift letter to Kevin
With theses two amounts.
I am Also paying all the closing cost and All the mortgage payments.
How do I protect the money we investing?
1- How can I make sure me and my wife own the house eventually?
2- Should I pay the mortgage to the lender directly?
3- Since my wife and I living in the house NOT Kevin, I want to meet the IRS rule in regard to the profit in case we sell the house, I want to be able to proof that I lived and owned the house for two years in the last five years.
Submitted: 7 months ago.
Category: Real Estate Law
Expert:  Lucy, Esq. replied 7 months ago.

Hi Mohamed,

I'm Lucy, and I'd be happy to answer your questions today.

1-2. The law says that, for an agreement regarding the ownership of land to be valid, it must be in a writing, signed by the parties. That means, right now, if your father-in-law decided he didn't want to give you the house after all, you would not be able to get a judge to order him to transfer the house to you. This is the same whether you made the payments to your father-in-law or to the bank directly. You'd be treated as tenants. Also at this point, he could serve you with 30 days notice to leave at any time. The only way to protect yourself is to get the agreement in writing. It should be clear what you have to do to become owners, whether your father-in-law has a right to take the property back if you miss payments, and who is responsible for taxes, insurance, and repairs between when you took over the house and when the deed is transferred into your name. Also note that, should your father-in-law pass away without a will before the house is paid, any spouse or other children he leaves behind would have a claim to your house. That's another reason it's important to get something in writing.

3. You're not considered the owner until your name is ***** ***** deed. That means there won't be any proof of ownership until your father in law signs the house over to you. He could add you and your wife to the deed, as long as the bank will agree, but the bank will probably want to add you both to the loan. The other option is to get a loan to pay off your father-in-law's loan (assuming he'll agree to sell it to you for the payoff balance). You'd have to pay interest, but the house would be yours. But the father-in-law has to agree to make you an owner. A written agreement would protect him in the event that you stopped paying for the loan.

If you have any questions or concerns about my response, please reply WITHOUT RATING. It's important that you are 100% satisfied with my courtesy and professionalism. Otherwise, please rate my service positively so I am paid for the time I spend answering questions. If you are on a mobile device, you may need to scroll to the right. There is no charge for follow-up questions. Thank you.

Expert:  Lucy, Esq. replied 7 months ago.

Did you have any other questions about this?

Customer: replied 7 months ago.
Hi Lucy,
1_ understand that we have to have a written agreement, but I need to know the guide line for the agreement you mentioned briefly, I need to know what is Important and should be listed on the written agreement.
_ I would appreciate a little more details about the agreement please? Or if you can share a link or some resources about a similar agreement.Thank you
Expert:  Lucy, Esq. replied 7 months ago.

There aren't specific guidelines for what the agreement HAS to include to be effective. It's just necessary that it lays out the agreement between the two of you. A third party needs to be able to pick it up and be able to tell what each of you had promised. Any local attorney can help you draft something specific for your needs, or you can write it yourself and ask your father in law to sign it. This site could help you draft a general rent-to-own agreement, but make sure any template you use includes the exact terms you're looking for. Read through the things I mentioned and make sure it's all addressed.

This site will walk you through creating a deed, and has an example, but the deed itself doesn't require your father in law to remove his name from the property at any point or outline what each person's obligations are.

Please rate my answer positively to ensure I get credit for the time I spend helping. If you are on a mobile device, you may need to scroll to the right. Thank you.

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