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First of all you would need to get title to the house
Is your daughter going to rent the house from you?
Let me know when you are available to "chat"......
I'm here too.
Hello. My daughter is not going to rent the house from me. I am concerned that the bank will not transfer the mortgage to my name. I do have good credit, but I would hate for the bank to call in the loan. We could not refinance at greater than the current value to pay off the current mortgage.
Right. I understand the issues. It is happening all over the country. Generally, the mortgage note provisions would provide the bank the option of calling the loan if title vests in another person, trust, etc. However, the bank's option is to foreclose & they would rather have someone paying on the mortgage. In order to claim the property as your rental property, you must have title. Once that is recorded, you could work out a formal mortgage assumption agreement with your daughter. If you do that, then the bank would need to foreclose on the mortgage as their only other alternative. Of course it would be better if you did this with the bank's knowledge & agreement.
Thank you. Let me look at this for a minute and see if I have any question.
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I'll be happy to answer any follow-up questions you may have.
I know this isn't strictly a tax question, but could you recommend a starting point? Should we contact the bank with the plan before investing any money in the project?
I do understand re the title must be in my name.
I would request a meeting to go over your plans for the property. You should be prepared to show how the property will support the existing mortgage & how much of an additional investment you plan on making - what exactly are you going to do & why in terms of enhancing the rental income. Then of course you'll need an attorney to draft a deed; etc.
Thank you for your answer, Stephen. Nancy Forrest (Customer)