Trying to take over my in-laws mortgage

General
1

My husband’s parents bought a house when he started college, with the idea of renting it out once he was done. 12 years later, my husband and I live here full time and pay the mortgage, but it’s still in their name. A few years ago, they tried to gift us the house so we could take over the payments at a lower rate and have more control. However, we were denied due to my husband’s medical debt compared to his income. They said I might have been approved if I applied alone. We have about 6 years left to pay off the house.

Since then, we’ve paid down some debt and my husband finished school. I also got a $10k raise, but unfortunately, our mortgage payment went from $1.07k last month to $1.6k this month, and it will go up to $1.8k next month due to escrow. I feel like I’m drowning. My raise has been eaten up by medical needs and my husband’s new student loan payments. He still works part-time and is looking for a full-time job.

What would you recommend? Are there any loopholes I should know about? Does it make sense to apply again by myself? My MIL texted me the bill while I’m at work, and I feel like I’m about to have a panic attack.

2

It all depends on if the mortgage is assumable.

3

Just do a purchase with a gift of equity. Have a broker pull both your credits and determine the best route based on your income.

4

Oli said:
Just do a purchase with a gift of equity. Have a broker pull both your credits and determine the best route based on your income.

The issue (if I understand correctly) is that we still need to get a new loan to cover the remainder, and we’ve been denied once.

5

@Teegan
The new loan will likely be at a higher rate. Are you planning to stretch the term out to a new 30 years to reduce the payment? What are you expecting to gain by ‘taking over’?

6

Asher said:
@Teegan
The new loan will likely be at a higher rate. Are you planning to stretch the term out to a new 30 years to reduce the payment? What are you expecting to gain by ‘taking over’?

Partially a feeling of control. My in-laws live far away and aren’t great at communicating. My husband used to operate with a ‘out of sight, out of mind’ mindset and would just pay bills as they came in. I handle our budget, but it feels like I’m playing a long game of telephone. He also mentioned that the mortgage is based on their income, but that may not be accurate.

7

@Teegan
Control is great, but you’re addressing a practical problem with a lot of emotion and anxiety. You need to understand:

  1. Why is the current payment going up? Is it simply a change in insurance, a tax increase, or an adjustable-rate mortgage hitting an adjustment period?

  2. What is the structure of the existing mortgage? What is the balance? What’s the amortization period? Is it fixed or adjustable?

8

@Asher
I’m trying to figure this out. Both my husband and I have ADHD, and whenever I ask him about something I don’t have access to, he just gives me a number, and neither of us remembers it later. I know it sounds silly, but I need spreadsheets. He’s picking up more hours now, and we’ve had a few conversations about me possibly getting a part-time job to feel secure. He’s working with a career advisor and his therapist to get things moving.

9

I would get added to the title right now (via Quit Claim Deed), while keeping your in-laws on title, and refinance the property in your name only. You could possibly extend the term to 10-15 years to make the payment more manageable. After refinancing, you can remove your in-laws from the title. This way, you’ll have control, and the payments will be under your name.

10

@Darcy
She said they can’t get approved because of poor credit, low income, and high debt.

11

Is your husband’s student loan federal or private? If it’s federal, talk to a loan officer about options to lower the payment based on his part-time status or even freeze it. If it’s private, there’s less flexibility.

For the mortgage, look into the insurance costs. Insurance rates are rising rapidly, so it might be time to find a new provider at a lower rate.

12

@Keir
Thank you. I believe they’re federal. I was trying to pay down the debt faster to get it off our plates, but it seems I’ll have to go back to minimum payments.

13

Teegan said:
@Keir
Thank you. I believe they’re federal. I was trying to pay down the debt faster to get it off our plates, but it seems I’ll have to go back to minimum payments.

Don’t stress over federal loans. They’re the most flexible when it comes to repayment options.

14

Escrow is something you pay no matter what; it’s taxes and insurance. Aside from that, can’t you just keep making the payments on behalf of your parents? It doesn’t sound like you can afford this house.

15

If you can afford to keep making the payments, have your in-laws quit claim the deed into your and your husband’s names. Have them sign a document with their mortgage company stating that you are authorized to talk to the mortgage company on their behalf, in case you fall behind and need to work something out. Continue making the payments as usual. Once the mortgage is paid off, the property will be yours free and clear. If there’s good equity in the house, you could even sell it anytime and use the profits after paying off the mortgage.

16

Trying to find a ‘loophole’ to make the home more affordable? I’m sorry, but it seems like you’re just trying to have something you can’t afford. Even if you took over the mortgage, you’d still be paying it. It wouldn’t magically be cheaper.

17

Depending on the program, it might make sense to try again. Medical debt is being treated differently now than it was a few years ago with some programs. If I can help further, let me know. TY, Matt