There are many reasons why you might be asked, or want to add another person to the title to your home. However, before you do, consider the following:
As an Inheritance • If you intend for another person to have your property upon your death, but you want to keep it during your lifetime, you do not need to add the other person to your title now. You can have a will made to carry out your intention to transfer the property upon your death. Be careful if someone tells you that adding them to your title now will avoid “estate taxes” if the property is transferred by a will. A trust might help you accomplish your goals, but consult an attorney or estate planner for a full explanation of your options.
As Collateral • Don’t agree to let someone “hold” title to your property. At some point you may want to take out a loan on your property to make repairs or pay bills or to refinance your mortgage at a better interest. Some dishonest broker or lender may ask you to sign a Grant Deed he or she can “hold” while they look for financing. Don’t do it! Once you sign the deed, there is nothing to stop the crook from selling your property or taking out a loan for him/herself without your knowledge. The crook may also refuse to transfer the property back to you, or if they do, there may already be new liens against the property. If you need to take out a loan, deal with a reputable lender and always insist upon an escrow.
To Help a Friend • Never add another person to your title just to help him or her get credit or a loan. It may be tempting because the person may be a close friend or relative and has a sympathetic story about problems he or she is having establishing credit or qualifying for a loan, but never add another person to your title just to help him or her get credit or a loan. If you do, you not only risk losing your property, but the circumstances might be considered as bank fraud. If the person tells you that the bank or lender told them that this is the only way for them to qualify for credit or a loan, don’t believe it. Honest banks and lenders do not operate this way. Also, if the person you add to your title fails to repay the loan or credit, you will be held fully responsible, your credit may be ruined, or you could lose your property.
In conclusion: if someone wants you to sign a paper regarding your house and you’re not sure what it is don’t even think of signing until an attorney reviews it and you’re satisfied.
For answers to your real estate questions . . . call me!
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