Legal Question in Real Estate Law in California
I own a real estate property in California and have a current mortgage loan that has NOT been late for the past 2 years. I have been unemployed the last 4 months, and my sister is currently assuming responsibility of the loan and making payments, to keep the mortgage up to date since she lives in the property. My sister likes the house and would like to take over the loan and continue making payments. She has a stable job but low fico score and no down payment saved, so it's difficult for her purchase a home at this moment. What is the best viable option for us to transfer the mortgage loan to her name?
2 Answers from Attorneys
You have no such option. Lenders in California have not been writing assumable mortgages for decades. You can read your loan documents and see if yours is one of the incredibly rare exceptions, but don't count on it. Furthermore, even if the loan was assumable, if she doesn't qualify for a loan due to her score, she wouldn't qualify for the assumption.
It also sounds like what you really mean is that you just want her to take over the house. You can't do that just by transferring liability for the mortgage. The mortgage is just a lien on the house. What it sounds like you really want to do is give her the house in return for her taking over the debt on it. Unfortunately that is a complex set of transactions and not something you can accomplish when you both have bad credit.
A California mortgage is usually not assumable. You probably don't have the option to transfer the mortgage to her name. The bank will tell you the same thing.
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