Ways to transfer mortgage to new owner

I am trying to take ownership of my parents boarding house but would like to keep the current mortgage the currently have on the home. Are there any methods out there I can implement to accomplish this other than sub-2 ?? :smile


You could assume the mortgage if the lender allows it.

Your parent’s could add you to the title. I don’t like this option because of the negative tax consequences.


What would the negative tax consequences be?

The heir loses the stepped up basis of the property if he doesn’t inherit. There is also the matter of the gift tax.

I should add that the parents can form some kind of business to own the property and gift ownership shares each year to avoid the gift tax. A buy-sell agreement or a self-canceling installment note are also possible. These options require professional guidance and should not be done in a DIY manner.