Is It Possible For Someone Else To Pay For My Mortgage?

Most lenders don’t really care how you repay your mortgage as long as you make your monthly payments on time. The law understands that sometimes due to unforeseen circumstances, a homeowner may not be able to complete his payments on a home loan. To answer the above question, yes it is possible for someone else to pay for your mortgage.

 Be clear on repayment terms

You need to alert the mortgage lenders in Montreal on the changes and make it clear as to whether you will retain the title of the house or you wish to transfer it to the person making payments. If you wish to transfer ownership then that means that the person paying the mortgage will need to start a new process to get a deed of trust. Usually, the lender will need to check his financial history to make sure they are able to take over the new responsibility. The lender will have to approve first before the third party can start making payments.

If the person is offering to pay without requiring anything in return, then that is treated as a gift. The law requires the person to pay gift tax on his monthly payments. Some lenders don’t accept payments directly from the third’s party bank account and so that means they need to transfer the cash to your account first. You need to have clear records so that it can be clear to the IRS on how much gift tax is deductible. There are some common circumstances that allow other people to pay for someone’s mortgage. Some of the common circumstances include:

Payments from a spouse after divorce

broker

Usually, a couple has to agree who will reside in the house after the divorce is complete. Just because a couple is separated it does not negate them from repaying the mortgage. A spouse can agree to pay the mortgage even after moving out. If the couple has a joint claim on the title of the house and they agree that the one residing in it has to take over mortgage repayments then he or she has to apply for a quitclaim deed. The lending company sometimes has to check financial statements to ensure that the new sole owner is able to repay the home loan.

Children paying for their parents’ mortgage

It is normal for a child to want to pay for his parents’ mortgage as one way of showing appreciation. If the child does not require the ownership of the title or he does not expect a repayment from his parents later on, then this is considered to be a gift. He will still be legible for a gift tax. If by any chance the child wants to assume the ownership title, then he has to undergo a process that takes 60 to 90 days. Lenders use this time to scrutinize his financial records before changing ownership. The parents have to confirm that they are willing to turn over the house title to their son or daughter.

Leave a Reply