Family Matters
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Anyone with real estate/title advice or knowledge??
Sorry in advance if this gets a little long-winded...H closed on his house in 2007 just about 2 weeks before we started dating (perfect timing huh). At the time, he was newly out of college and wasn't very well established yet so his dad "helped" him (I have my own ideas about just how much help it really was but that's another issue) with the purchase and gave him $5,000 for a down payment which he said was a gift.Fast forward to present day where my H and I live in what SHOULD be our home, but instead it just feels like H and FIL's home since they legally own it together. His dad is on the mortgage, deed and title. My concern is that we are married and it should be our home and do I have any legal rights here. We've talked to one bank about a refi which would let his had sign off his rights and put my name on everything (essentially switching the interest from FIL to me). However, the bank suggested that it wasn't the best idea and a refi would also cost us between $1,700-$2,000. We are planning to be in the house only a few more years; basically as soon as we can get out without being underwater so it's dependent on how the market plays out. Does anyone have any advice on this situation? Is it worth it to pay the money to refi to have my name on? Unfortunately, I don't really trust his dad because of some things that have happened in the past so I worry that if something were to happen (God forbid!) that I would be left with nothing. It wouldn't be that big of a deal except for the fact that H and I pay the mortgage payments every month with our JOINT money and we've also sunk A LOT of money into the house remodeling it. It really just bothers me too that it isn't "ours," even though my hubby says I shouldn't worry about it. Does anyone have advice on if there are any other options for us? What would you do in this situation? Oh BTW, the $5,000 that was supposed to be a "gift" has since turned into "You owe me that money whether you give it to me when you sell the house or if you pay me otherwise." I'm not really sure why it is such a big issue to him all of a sudden since $5,0000 to him is like pocket change. Meanwhile, H and I struggle to save for the future and for a family and his dad goes on vacations all the time, has 2 homes, drives top of the line luxury vehicles, etc.
Re: Anyone with real estate/title advice or knowledge??
So many things going on here:
#1. Why do you want to be on the hook for a house that is under water? If something does "go wrong", FIL will have to step up to help take care of it.
#2. You say you've put all this money in for remodeling and then in the next breath talk about spending another $1200 to refinance just to switch owership. Tell me how that makes sense if you want out as soon as is humanly possible? If it's not an improvement that will help you sell or a necessary maintenance item, stop spending money on this house.
#3. Unless FIL and DH have a written agreement that the $5000 was just a gift, pay him back if he's asking for it. If you really don't want to when the house sells (and it makes zero difference how much he has or what he does with the rest of his money... plus, do you really want to burn that already shaky bridge?), it should be a discussion between DH and his dad. Stay out of it. You were not in the picture when the transaction went down.
#4. If the mortgage payments and improvements are being paid for with a joint account, that was your choice. You have no recourse for that money (again, unless you put something in writing when you got married and started contributing) if the house defaults because you are not an owner and willingly comingled your money for the houses expenses. If that arrangement is no longer accpetable to you, then you'll need a lawyer.
Sorry, this is not a scenario where you can dictate what DH and FIL should do. And unfortunately, you didn't protect yourself legally and financially beforehand. It's not technically a marital asset because he owned it before he met you (this may not be accurate depending on your state's laws, so you might want to double-check).
We have what is called a quit claim deed that would get your name on the title (in my county its only $120 to file). Personally I wouldn't care if my name was on the mortgage....as its actually bad "planning" that your FIL is on the mortgage as well since he is legally obligated to make the payment if you don't. i.e. if you decided to walk away from your property, your FIL's credit would take a hit too if he didn't make the payments.
As far as the $5K...just pay it back. It doesn't matter if your FIL goes on vacations, etc. He gave your H $5K to buy a house and wants it back. Thats just something you'll need to get over since your H should have properly documented everything (and the fact that FIL is on the title would lead me to believe he wanted his money back.)
1.) Pay FIL back. ASAP.
2.) Call and get a consultation with a real estate lawyer in your state. Ask for a referral from a real estate agent - they will know the honest ones in the area. Meet with the lawyer, ask all of your questions and figure out what it will take to get FIL off the deed and you on.
3.) After you have paid FIL, save up the money and do a re-fi. Mortgages frequently have an immediate repayment clause in them so that if the property changes hands in ANY way, they get their money back NOW. The bank is not going to want to let FIL off the mortgage - he makes the most money. Be able to put a chunk down to sweeten the deal for the bank.
1. A quitclaim deed is an easy way to put someone on a title or for someone to relinquish their right to the property, but either way, all parties currently on the title would have to sign it for any transaction to take place. No matter what, you can't put yourself on the title or take FIL off without FIL agreeing to it and signing the paperwork.
2. Some mortgage companies don't want people on the mortgage who aren't on the title. It's OK the other way around (example, DH and I are both on the title of our house but only I'm on the mortgage) but they don't want people on the loan who aren't actually in control of their asset (the house). If your mortgage company has this rule, you can't get FIL to take himself off the title but leave the mortgage in his name. If that's the case, your choices would either be to refinance, or leave the whole thing alone.
IMHO... you should either suck it up and pay to refinance, ask FIL to sign the quitclaim, and fix both the title and the mortgage issues.... OR you should just leave the whole thing alone and don't get your name or credit mixed up in it. If the worst-case scenario happened and the house was foreclosed on, at least you would have your name and credit to buy a new house with.
I agree with everything kelnyc said. It's almost like she read my mind.
I'm no expert, but if the house is underwater and you hope to be out in a few years, I wouldn't bother with any of the stuff about changing the title/deed/whatever. Save that money that you would spend refinancing and just concentrate on putting it toward finding a new home. My answer would change if you really love this house but I'm not sensing any particular attachment.
I think it sucks that FIL is now saying that the 5K was not a gift. However, I feel that you should probably just pay him back.
This is an ugly situation. Putting your name on the deed would only make it uglier.
By keeping you name clear of this debt, you will be freer to establish homeownership on your own should your marriage go south or your DH get foreclosed on.
If your fear is about DH dying, he could buy a policy to cover the value of the house and set you up in style. If it's about losing in a divorce, you can't lose what you don't actually own.
DH owned a home he bought just before we married, we added me to the mortgage and deed around the time we were married a year as part of a refi. It was a different time given the house had doubled in value during that time. During that year I had paid additional money towards the principal and was able to shave 10 years off the mortgage which gave us considerably more equity at the refi. This is also an option for you.
I am sorry that you are going through this. I understand this very well.
My husband purchased a home 2 years before we met. As soon as we got married, he put my name on the title. It was cheaper than a refi and the refi made no sense since had planned from before we got married to get something that was ours.
I will tell you that, regardless of whether my name was going to be on it or not, he still bought it before we met so it really was not ours. We recently purchased a home together and we are both on the mortgage now and it feels very different.
Also, about the $5000, if FIL is on the house then the $5000 was his downpayment. He owns the home and has a right to it. Be thankful that all he is asking for is $5000. He is legally entitled to half the proceeds.
I wouldn't even be putting my money in to fixing anything up if it is underwater. Get a receipt when you pay back FIL. Find out if he intends to take a 50% share of the sale, although if you are underwater it shouldn't be a problem. Get things in writing.
Make sure your DH has a will leaving you his share of the house.
It's nice to hear that someone understands my situation. It was just a matter of bad timing. FIL encouraged my hubby to buy a house, he closed on it, 2 weeks later we started dating, and now 4 years later we are where we are. Do you know how you were able to be added to the title without a refi? We've been told that a refi is the only way for that to happen so I'm a bit confused.
It sounds like you understand how I feel emotionally about this as well, even if it doesn't make sense to other people. Since he bought it on his own, it has just never "felt" like it was ours, it always feels like I'm just a guest there. That's another reason we've made changes, not only to increase the value but also so make it feel more like ours together.