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Julieann, Other/Just Looking in Los Angeles, CA

My husband and I are in the process of refinancing our house in California. It should be noted that we

Asked by Julieann, Los Angeles, CA Sat Jan 31, 2009

Our refi broker advised that the loan be obtained in my husband's name only to ensure a better interest rate since his credit rating is higher and were assured that my interest in the house would remain but that I would have no personal obligation for the mortgage. However, now that we're actually in escrow, we found out that I must sign what appears to be a quitclaim deed, giving up my rights to the title of the house, including any community property rights. Needless to say, we're both flabbergasted, but are reluctant to lose out since we're locked in at an incredibly low rate. (This psychologically hurts even more since I paid for original down payment and MY parents gave us a Christmas gift of money to cover closing costs now.) IF we go ahead with this and I sign the quitclaim, can my husband put me back on the title after the refinance without the loan being accelerated? AND what about federal gift tax?

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Julieann,

This is very common. Don't worry. As easy as it is to remove you with a quit claim deed, it is that easy to put you back on. It is done all of the time in California. I am in San Diego and a RE boker. Dyanna is quite correct. To save money have escrow draw up the deed now. If you ask, they may even file it for you after you close.

Technically, you did not change ownership so the loan should not accelerate. I have never heard of one doing so yet. And as I said, this is done all of the time.

No gift tax for closing cost if less than $13,000 See Below

From The IRS website:

Who pays the gift tax?
The donor is generally responsible for paying the gift tax. Under special arrangements the donee may agree to pay the tax instead. Please visit with your tax professional if you are considering this type of arrangement.

What is considered a gift?
Any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money's worth) is not received in return.

What can be excluded from gifts?
The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. Generally, the following gifts are not taxable gifts.

Gifts that are not more than the annual exclusion for the calendar year.
Tuition or medical expenses you pay for someone (the educational and medical exclusions).
Gifts to your spouse.
Gifts to a political organization for its use.

How many annual exclusions are available?
The annual exclusion applies to gifts to each donee. In other words, if you give each of your children $11,000 in 2002-2005, $12,000 in 2006-2008, and $13,000 on or after January 1, 2009, the annual exclusion applies to each gift.

:) YAY!!

Good Luck!
0 votes Thank Flag Link Sat Jan 31, 2009
Julieann have escrow draw up a grant deed having your husband adding you on to title. After you close escrow you can take it to the county recorders office and you will once again have an interest in the house.

Good Luck!
Dyanna
0 votes Thank Flag Link Sat Jan 31, 2009
WOW, talk with real estate attorney an option consider if you place a lien on property immiedately after close he could never sale home unless you release lien OR have your parents place lien on property since they loaned you money. I am sure there are ways to work around all.

What about state law can he purchase a home without you on title?

Title company is another resource speak with
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Sat Jan 31, 2009
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