Q: If add my father to the deed for my townhouse in MD, could that void the mortgage and let the bank take the house?
Great question! In many situations, a new deed will trigger the "due on sale" clause in loan paperwork and require immediate repayment of the mortgage in full (for example if someone deeds all or part of their home or attempts to sell the house without paying off the loan).
A federal law called the Garn St. Germain Act provides for certain specific exceptions involving common estate planning tools. But these are very specific. For example, transferring an interest in one's home to a revocable trust or to a spouse or to a child will not normally affect the mortgage at all. However, and interestingly, while a parent can usually safely deed a mortgaged house to their CHILD, a child to PARENT transfer is not contemplated by the law (unless the transfer happened due to a child's death).
Because adding a parent is not specifically listed, it would be a good idea to get the lender's approval in advance. Not only that, but in some MD counties, a child adding a parent to a deed will also trigger transfer taxes. There are other options, though, which would not affect the mortgage depending on your reasons for wanting to add your dad to title. If your goal is to just make sure your father would have the house if you were to pass while owning it you might want to consider putting the property into a revocable trust or using an enhanced life estate deed and naming a relative as remainderman. I'd encourage you to talk these options over with an attorney - they might suit your situation without the pitfalls of an outright transfer during your lifetime.
While not legal advice I hope that this general information helps!
Anthony M. Avery agrees with this answer
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