Paying the Mortgage When You Don’t Own the Home

If you want to pay the mortgage on a home you don’t own, giving home ownership to your family, there are several ways to do that.

Q: My parents are divorced and my father would like to sign his half of the house over to my brother and me. The only problem with this is that he does not want to transfer the mortgage to us and wants to continue to pay it himself.

While he has no problem being the one paying the mortgage, he doesn’t want to actually own half the house. Is there a way that he can do this? He would like my mother to retain her half of the house, my brother and I to own the other half, and he will pay the bills. Can this be done?

A: The reality is that your father can do quite a bit with the ownership structure of the house and the mortgage.

When your father took out the mortgage, he signed many documents, but the two most important were the promissory note and the mortgage. The promissory note was the document that made your dad personally liable for the debt while the mortgage was the lien on the property giving security to the lender for that debt.

If your father sold the home without paying off the note, he would still be personally liable under the loan and the mortgage would continue to exist on the home.

We’re not sure what your father’s intent is in transferring his interest in the home to you. If your father wants to transfer the property to the two of you, you need to make sure that the half of the property he wants to transfer is his to give. You might need the help of a title insurance company to understand what he has and what you’d receive.

Now, if you know that he owns half of the home and you know that you want to receive that half, you can have him transfer his interest in the home by using a quitclaim deed or other conveyance document appropriate for use in your state.

You need to make sure, however, that this transfer is in your father’s best interest. If there is little equity in the home, he isn’t transferring much of value to you. If there is lots of equity in the home, you’d have to consider what the divorce decree discussed about the disposition of the home. You indicated that your parents are divorced, but shouldn’t the marital settlement from the divorce indicate the disposition of the home?

While we appreciate that you would end up owning half of the home, you need to consider the divorce and the impact it might have on your mother as well.

Finally, you should know that if your father fails to pay the payments on the loan, the lender can foreclose on the home, sell the home to satisfy the debt and you, your brother and your mother would end up losing the home.


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3 Responses to Paying the Mortgage When You Don’t Own the Home

  1. Philip Jones says:

    The person who asked this question should not be referred to a title company for advice. Title companies are not permitted to give legal advice. This question involves several legal issues, and those questions should be answered by an attorney.

  2. Samuel J. Tamkin says:

    Phil,
    Thanks for your comment. The title company may not give him legal advice, but can tell him who owns the title to the property. He needs to know and understand the ownership structure of the home to then decide what to do. He can hire an attorney and the attorney might get that information from a title company and he could end up at the same place.
    Thanks.
    Sam

  3. susan says:

    i sold my house but the second mortgage never became due.
    I am still paying on it.
    What are my obligations?

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