Can a property and mortgage owner,transfer the mortgage to her adult child without selling the property to and the child having to refinance?

My mother-in-law wants to give a property she owns/has a mortgage on to my wife. However, sheis not sure if she can do this without selling the property to my wife and us having to go through the whole refinance procedures. Right now the mortgage is very low pay-off and pretty low interest rate.

Asked on May 29, 2012 under Real Estate Law, Idaho


M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

I would consult with ana ttorney in your area about a bit of estate planning, possibly setting up a trust for the house and to take a look at the mortgage. Generally speaking, a transfer of the house will trigger the "due on sale" clause in a mortgage and thus essentially call in the loan. But a transfer to a trust with your Mother in Law as the beneficiary and then your wife as a remainderman may work.  Also leaving a house in a WIll to a party does not trigger the clause.  Your wife could continue to pay the mortgage off after your Mother in law passes until the house is paid off.  Good luck.

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