Q: I am moving to the suburbs and I have a condo I want to give the condo to my son .
There is still a mortgage on it and just want to know as long as he takes over the mortgage I want to give him the property
There is not a question, only a situation. And it really isn't estate planning.
You cannot give him the property as long as he takes over the mortgage. How do you plan on giving him the property, and when? Is this transfer to be done in your will? Will you deed the property over to him before he starts to pay the mortgage? Do you plan on having him hold interest in the property in joint tenancy, tenancy in common? Are you selling him the property for the remaining balance of the mortgage? How much is left on the mortgage? What about transfer tax? What if he defaults on the mortgage payments? What if he is late on the mortgage payments? These are all things you need to think about before giving him the property as long as he takes over the mortgage.
A: Ownership, leases, and security interests are all separate matters. You are free to gift or sell the condo to your son, but that does not eliminate or transfer the mortgage. You should look at your mortgage loan agreement to see if it has a due on sale clause. If you "sell" the unit to your son you may trigger a technical provision that allows the mortgage holder to request payment in full. In short, your intentions are altruistic, but you need to understand that these are all separate moving parts. It is possible that your son will move in and make the mortgage payments. That does not transfer ownership. So if something happens to you and you have not established the appropriate transfer instruments, the condo might not end up being owned by your son even though he lives there and pays the mortgage. The bottom line here is that if you are moving out and don't want to pay the mortgage, then you have some thinking to do. Hope this helps.
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