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My wife and i borrowed $241,000 from my parents to purchase…

Customer Question
My wife and i...

My wife and i borrowed $241,000 from my parents to purchase a home out right so there is no mortgage. We all signed a letter stating that my wife and I are to repay the loan over time. Due to hardships, left my job to help son overcome his addiction, and bills piled up so repaymennt stopped. We need to repay the loan and because im still out of work, the best way i know to repay my mom(father died) is to do one of these options:

Lawyer's Assistant: Where is the home located?

DELAWARE

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

1- ADD MOMS NAME TO THE DEED.2-ADD MOMS NAME AND REMOVE WIFES (SHES OK WITH THAT).3-OPTION 2 THAN AT LATER DATE REMOVE MY NAME AS WELL. I DO NOT WANT ANY TAX IMPLICATIONS FR ANYONE.

Submitted: 4 months ago.Category: Real Estate Law
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Customer reply replied 4 months ago
no steps taken thus far
Customer reply replied 4 months ago
We repaid about $94,000 of the $241,000 borrowed so we still owe $147,000. I would say that the current market value (if need this information) is roughly $330,000.
Customer reply replied 4 months ago
new castle county, delaware
Customer reply replied 4 months ago
i need to go to bed. I will look for an emailed response tomorrow
Answered in 1 hour by:
3/15/2018
Real Estate Lawyer: Bill Attorney, Lawyer replied 4 months ago
Bill Attorney
Category: Real Estate Law
Satisfied Customers: 2,642
Experience: Attorney
Verified

Dear Customer ,

Thank You for posting your real property and contractual debt question this evening.

I'm attorney Bill following up on your question.

Because an agreement to borrow and repay is contractual in nature the terms of repayment are governed by your express agreement.

Both parties can renegotiate the initial contract and agree to any of the options that you have submitted.

Transferring the title is something that you can do by quitclaim deed or other deed so long as you complete the necessary sales purchase agreement. Your agreement should describe the transfer of real property as consideration for the full due debt owed.

You would need the written signature of all title owners to execute the said deed.

We are here to help so please follow up with me as required.

In return your positive rating is much appreciated.

You do this by rating 5*****, 4**** or better.

FIVE STARS or your rating in this regard is much appreciated.

Best

Attorney Bill

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Customer reply replied 4 months ago
Thankyou for the response.So if i do a quitclaim deed stating we are transferring full ownership of the house and deed over in consideration of the entire debt owed and we sign the quit claim deed in the presence of a notary that will make the transfer official and we then just turn the paper work over to the county deed clerk so they can update the deed records.Now, will their be any inheritance tax or transfer tax that anyone will have to pay? If so how much or what percent? Considering that the home ownership is being transferred over free as repayment for a debt and is not being sold to her or gifted to her, will that exempt all people from paying a transfer tax or inheritance tax?Will the transfer of ownership have any effect on anyones consumer credit rating?
Customer reply replied 4 months ago
As far as transfer tax OR tax exemption on the property transfer does my situation(transfer a deed to repay a debt with no money exchanged, State- Delaware, County- New Castle County) match any of these exemptions listed below?Transfer Tax Exemption
While many states impose a tax on land transfers, many states also recognize exemptions to the tax for common transactions. Your transaction MAY be exempt from the transfer tax if the transfer involves any of the following:A gift among family members where no money is exchanged
A transfer among family members where only nominal consideration is given
A transfer releasing property held as collateral for a debt1st exemption stated: My opinion is that its not a gift , its a repayment of a debt.
2nd exemption stated: I'm not sure about the wording here if this is my situation or not.
3rd exemption stated: The property was never held as collateral since we were on the deed to begin with even though a notarized note states we are to repay the debt.Would I be exempt from transfer tax?
Customer reply replied 4 months ago
from new castle county recorder of deeds:STATE OF DELAWARE 2.50% State Affidavit Required
NEW CASTLE COUNTY 1.50% County Affidavit Required
NEW CASTLE COUNTY EXEMPTION County Affidavit Required
County Exemption Form Required
NEW CASTLE COUNTY County Affidavit Required
1ST TIME HOME BUYER 0.75% County Exemption Form Required
Lenders Certification Required
The Recorder of Deeds collects Transfer Tax for the State of Delaware, New Castle County, City of Newark, Middletown
Delaware City, New Castle City, Smyrna and Town of Clayton. Payment for transfer tax should be made in two separate
checks: one check for the State portion and one check for the County/Municipality.
BOTH checks should be made payable to 'New Castle County"23 MIDDLETOWN 2 State Affidavits Required Phone(###) ###-####Two checks payable to New Castle CountySO it sounds like i have to pay 1.5 % of some amount(market value, tax assessment, debt I owe my mom???) unless i fall under the three exemptions i listed?
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