Post # 1
My parents own the house my husband and I are currently renting and my dad recently told me he wants to give me the house but also made it clear that he wanted just me to have it, meaning it will be in my name and my husband will have basic rights but not homeowner rights. My dad thinks my husband has been deliberately irresponsible financially and has seen it hurt our kids and I so he specified that the house will only be in my name. I haven’t had a chance to talk more about it with him so I’m wondering what else this means in the long run? If my husband and I want to sell and buy later on, any insight into how that goes if I don’t have credit built up but my husband does but I have a house in my name? I am new to this and want to know how to approach this even when talking with my dad. Thanks!
Post # 2
If the house is in your name, when you sell (assuming you own it outright- no mortgage) the cash would be 100% yours.
Now depending on where you live, if you and hubby got divorced, he may still be entitled to half of the house (unless there is some sort of pre/post-nuptual agreement) which- if you couldn’t pay him for half of the value (ie- house is worth 100k, you’d have to give him 50k in cash if you kept the house) would mean you would have to sell it- to be able to give him ‘half’.
If you sold the house and bought another- together- you could still use his credit. However, you yourself can still have a good credit score even without working– if you own the house outright, you can get credit cards- use them a few times a month- pay them off right on time, and watch your credit rating go up. Read up about ‘credit utilization’– I pay off my CCs every month, just put my daily spending- gas, groceries, dinner- on them, so I thought it would be better to have lower limits on my cards- wrong! The more credit you have in your name, and the less you use positively affects your score!
Ok, sorry – long tangent. Haha. Lets say you decide to sell the house- it’s in your name, so 100% of the profit will go to YOU. Now you can decide what to do with that money– if you buy a house of equal or lesser value, you can do so with cash- so you would need NO credit at all haha (plus buyers would looooove you). And it could remian 100% in your name. Or if you want a bigger house and a mortgage, you could see who’s credit (yours, hubbys) would get you a better interest rate. Now, typically the more cash you have to put down, the lower you can get your interest rate– banks can ‘overlook’ a lower credit rating if you have a larger downpayment– why? Because if you put down 50% on a 200k house, if you default, you’re going to loose a lot too! So they look at that as you having less to lose.
Sorry, I could go on and on… PM me if you have more questions 🙂
Post # 3
theresabow: You may want to talk to an attorney with experience in real estate law about this matter. It might make sense to draw up a post-nup agreement concerning what would be a marital residence for you and your husband. Best to know all the ramifications before changing the title.
Post # 4
Generally, property accquired by one spouse during the course of a marriage is marital property. I would consult with a family law attorney to determine what your state’s laws regarding marital property are and how to proceed here.
Post # 5
I would also add that you need to consult an estate planning attorney to ensure that the house passes properly to your husband and kids in the events of your death so that they aren’t booted out of the house. Otherwise of you die first and your estate has any outstanding debts they may be forced to sell if he isn’t a legal owner.
Post # 6
If your father is giving you the house, he will likely quitclaim deed it to you and you alone. This will not affect your credit unless you are assuming a mortgage but that’s doubtful for many reasons. It will not affect anything when it’s time to sell except to say you are the only one who will sign a purchase and sale agreement along with closing documents because you will be the sole owner. As the sole owner, you alone will be responsible for real estate taxes and homeowners insurance on the property. In short, your husband has no ownership rights since he would not be on the deed or title. However, depending on what your state laws are, the house may be considered marital property whereas it’ll be awarded to you during the marriage and not prior. So if something should happen and you two divorce, he might still be entitled to equity in the home (fair market value minus any debt owed). In that case, you may be required to refinance, take cash out (equity) and pay him his half. This is less likely since he was not on the title to begin with but you will want to ask a real estate lawyer (who will likely consult a divorce attorney). Be aware that like a pp said, if something happens to you, your husband and kids would not be entitled to the home unless a legal instrument were on record (trust or will or life estate) giving the house to him. I recommend a trust since in most states, a trust means no probate process while a will usually does still go through probate (which can be lengthy). OR….you could go against your dad’s wishes and quit claim your husband onto the deed after the fact…although I’m betting that wouldn’t go over well at all. 🙂