If you have a property, there are a number of things you can do to transfer your ownership. These include refinancing your loan, adding someone to your deed, and changing your ownership status. There are some hidden risks as well, so it pays to have an attorney weigh in before making a decision.
While it is true that there is a small amount of money you can save when you transfer ownership of your property, there is a big cost associated with this process. Specifically, you may have to pay a document transfer tax, which can add up to 1.1% of the value of your property. To avoid this tax, you can hire a real estate attorney to draft a new deed.
The most obvious way to make sure that your property transfers to your heirs is to sign a Beneficiary Deed. This type of document is not a real transfer of ownership, but it will let you name a heir as the legal representative of your interest in your home. You can also change your beneficiary at any time.
There are other less obvious ways to pass your title to your heirs. These include a quitclaim deed, which overrides your current deed. However, if you are going to do this, you must get the consent of the original lender.
The same is true of a due-on-sale clause. Most mortgages come with such a clause, which essentially calls in the loan on your behalf when you sell your home. If you do not have the requisite permission, you could end up with a hefty bill for the balance of your mortgage.
A more complicated process is a joint tenancy deed. As the name suggests, a joint tenancy is a partnership between two or more individuals. When one owner dies, their share of the property passes to the surviving spouse. Many lenders have such a clause built into their mortgages, which means that it is possible to add a co-owner to your deed. Despite this, some states don’t recognize a joint tenancy deed as a legitimate form of ownership.
Adding a loved one to your house deed can be a huge undertaking, requiring the help of a lawyer to figure out which deed is the best to use. In addition to this, you will need to complete a gift tax return, which can be complicated. Additionally, you should contact your lender for more information. Depending on your situation, you may need to refinance your loan to make the transaction work.
While there are many benefits to adding someone to your house deeds, there are also risks. Some of the most serious are that the other person could wreak havoc on your credit, which can have dire consequences when it comes to your ability to buy and sell a home in the future. Also, you don’t want to put yourself in a position where you have to give up your home if your partner breaks up.