How do my sisters and I hold a mortgage to allow my son to purchase our dad’s home when he passes?

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How do my sisters and I hold a mortgage to allow my son to purchase our dad’s home when he passes?

Asked on December 8, 2015 under Real Estate Law, Maryland

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

The mortgage and the right to purchase a home are separate. Your father could will the home to your son, so he will get it when your father passes; your father could give him the home right now but keep a life estate for himself, so that you father can continue to live there, though the home will automatically revert to your son when your father either passes or moves out (e.g to assisted living). Your father could, if he doesn't want to give or will the home outright to your son, have his will state that your son will have the right to buy the home at some set or fixed price, which can be a favorable one. Etc.--there are many ways to do this.
In terms of mortgage, if you are talking about a mortgage that your father gets from a bank, that generally cannot be taken over by another person--there are clauses in the mortgage to prevent that. It would have to be paid off when your father dies. Or if you and your sisters took a mortgage out from a bank, you can't generally transfer it to your son for the same reason. But if mean that you and your sisters would give your father a private mortage, then if you and they are lending the money, you could allow your son to take it over.
Again, there are many ways to get done what you seem to want. Decide exactly what you'd like to happen then consult with a real estate attorney, who can structure it for you.


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