Legal Question in Real Estate Law in Pennsylvania
Mortgage assumption or what else?
Hi, my father has a mortgage on his house but has been having trouble paying it with man late payments. My wife and I moved in with him a few years ago and pay the mortgage, amongst other things, most of the time. We all get along together very well.
He has the mortgage, through Wells Fargo and his name is on the deed/title.
My wife and I would like to be added to the mortgage and title/deed and take over the payments, even though our credit is awful. I would think that the mortgage co would like two more people to secure the mortgage.
The mortgage co told me the best way to go would be an assumption and to get our names added to the deed.
Is there an easier way? While we do want to assume the loan, we would like to keep his name on it as well, so that the mortgage co would be more inclined to approve.
I am filling out the assumption papers and thought I would stop and ask here.
Thank you very much in advance. Any help would be appreciated.
1 Answer from Attorneys
Re: Mortgage assumption or what else?
Has the mortgage company asked that your father give up his interest in the house, as a condition for your assuming the mortgage?
The mortgage company probably is asking that you "assume", that is agree to be bound by, the terms of the existing mortgage, as a condition for you and your wife being added to legal title, as co-owners with your father.
Usually, mortgage companies will look into the financial condition and credit history of anyone assuming a loan, in much the same way as they look at your credit when you are seeking a new loan. If your credit is impaired, you may have difficulty getting the mortgage company to approve your assumption.
If it approves your assumption, the mortgage company will have forms for you to sign. You should consult a lawyer for advice on how the new deed should be titled. You'll want to be sure that it clearly says what percentage interest each of you owns, and you and your wife may want to own your interests as "tenants by the entirety", which means that upon the death of the first, the survivor will automatically become the sole owner of that interest.
It may also be advisable for you all to have a co-owners' agreement, that spells out what each person's rights and obligations are. For example, in case one person wants to leave, there should be a method for buying that person's interest. You should also spell out how you allocate the value of each person's interest, including who contributes and in what proportion to the expenses and maintenance of the house.
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