Full question:
I have an FHA mortgage with my brother (who is engaged), it is currently worth less than we paid for it. He would like to give me full ownership which I agree to. However, I cannot qualify for the loan by myself. How can we legally give me ownership (even if he may still be responsible for the debt if I default) and be sure that I would not lose the house in the event of his possible divorce? I do not know how to go about getting this done or which form I may need. Thanks for your help.
- Category: Real Property
- Subcategory: Deeds
- Date:
- State: Arizona
Answer:
You can have him sign a quit claim deed to you, which would remove his interest from the property (of course, the bank may object if they find out because of the "due on sale" clause). Most lenders require that the mortgage or deed of trust contain a due on sale clause. This is an acceleration clause in a loan, calling for payment of the entire principal balance in full, triggered by the transfer or sale of a property. Such a clause permits a secured mortgage lender (federal, state or private) to call the entire unpaid loan balance due and payable immediately if the property securing the loan is sold, transferred, traded, gifted or otherwise disposed of without the lender’s prior written consent.
Generally, property owned before marriage is considred separate, rather than marital property. However, the brother may wish to have the fiance sign a prenuptial agreement or disclaimer deed.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
