House transfer to avoid cash-out refinance? FHA loan vs. gift ownership?

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  • #94044 Reply

      One of my family members is needing cash. They have a house that is half paid off. They need the money tied up with the house. They do have the other half of the mortgage in cash but due to some personal reason, they’re asking me for a favor, if they could transfer the title to my name and then I would take out a loan against it. Meaning they would pay off the house first then transfer it to me.

      What is the process to change the ownership and would it cost anything let say it’s a gift to me? And how do I search for a lender to cash out the house later on?

      I’ve tried to google but it seems confusing. I’ve never owned a home before, decent income and good credits. Any inputs will be greatly appreciated. Another scenario is that I would just outright buy the house from them. I would get FHA loan with 3% down. Which scenario would be more benefical in long term?

      Appreciate all inputs.

      #94045 Reply

        When anyone asks you to do anything with your credit – the answer is no.

        #94046 Reply

          Why don’t they just put it on the market and sell it? Unless you need the house, I would not participate in that exercise.

          #94047 Reply

            HECK NO! And I don’t mean heck!! NOPE NOPE NOPE!! Sketchy as hell. Sounds like they will stay in the house even after you purchase? Meaning the bill is on you if they don’t pay the mortgage? If they want to sell their home, they should sell it.


            #94048 Reply

              They can either sell or get a home equity line of credit. They have a lot of options, just gotta make the hard decision of opting for one. This is not your problem, it’s theirs.

              #94049 Reply
              Mack G

                Um, sounds like you’re going to get screwed in the end. It’s a hard no for me. Plus, you most likely would get a huge tax bill.. WTH?

                #94050 Reply

                  Absolutely not. “I don’t feel comfortable doing that” and that’s the end of that convo.

                  #94051 Reply

                    This makes absolutely NO SENSE. Stay clear….

                    #94052 Reply

                      Do NOT do this. Just say “I’m sorry, I looked into it, but I wasn’t able to get a loan.” and keep repeating it each time they ask.

                      #94053 Reply

                        Don’t do the deal.

                        If you want to help them out just give them some money and consider it gone.

                        That is the only way to deal with family and money that doesn’t suck for everyone.

                        #94054 Reply

                          No. Probably a scam. And if they gift the house to you there’s huge tax implications.

                          #94055 Reply

                            They need cash, but have enough cash to pay off the 50% loan?

                            It seems that their profile is not great, or they would cash-out refi or take out a 2nd on their own.

                            If they don’t have cash (seems more plausible), then the question is do you want to help out, and to what extent.

                            If you want to help them access their equity, then it seems like this would be an investment property for you.

                            You could get pre-qualified to see if you are eligible for the loan you desire (and loan options vary depending on owner-occupied or not). You need an appraisal to determine fair value of the purchase. You would need to determine market rent, and see if covers the costs (including higher property taxes). You would need a lease with them to protect yourself (and that lease income may count as income for loan underwriting). Are you prepared to be a landlord if they take their money and “run”?

                            #94056 Reply

                              I would run from this as fast as I absolutely could. If they need to sell their home they should contact a real estate agent and put it on the market. This has red flags all over it.

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