QUESTION
What options do I have to have this person removed and have the mortgage in my name?
Asked on Jul 20th, 2015 on Estate Planning - Illinois
More details to this question:
I purchased a condo 2 1/2 years ago with a co-borrower. I'm trying to figure out how to do this, and in looking around I've come up with this scenario. I would like to know if it sounds plausible, or if there are better routes to the same goal. It appears that the easiest way to remove the co-borrower would be to refinance, but I will need a co-signer as my income alone would not qualify me for the full amount needed. My grandmother has agreed to co-sign, and would like to eventually pay off the mortgage for me (amazing, I know). The funds she would use to do this are currently tied up in investments, and she would like to avoid the huge taxes charged for gifting this amount (about $165,000). For the time being, it seems it makes the most sense for her to just make the monthly payment to the mortgage company (without exceeding the annual gift tax maximum), and revising her will to leave the property to me and paying off the remainder of the mortgage with the inheritance, but I'm not positive this would be the right choice. Any insight would be appreciated.
2 ANSWERS
Estate Planning Attorney serving La Grange, IL
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Law Office of T. Phillip Boggess
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You may be able to have her as a co-signed but not on the deed. So the condo is yours but the bank can collect from her if you don't pay.
Answered on Jul 24th, 2015 at 10:46 AM
Commercial Attorney serving Chicago, IL
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Ashcraft & Ashcraft, Ltd.
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There is no practical way to remove a co-borrower from a mortgage. You have to pay off the mortgage. That means a refinance. Your grandmother could be put on title to the property with you as joint tenant. That way she is a part owner and the survivor would be the sole owner on the first death. As a part owner the grandmother could pay more of the mortgage on an annual basis without exceeding the annual gift amount. The grandmother could changer her will to direct her executor to pay off the mortgage. Alternatively, your grandmother could make you a legatee under the will in a sufficient amount to pay off the mortgage.
Answered on Jul 24th, 2015 at 9:26 AM