DEAR BOB: My son bought a house with his girlfriend. They are now separated. Is there an inexpensive way to get her name off the mortgage other than refinancing? –Cathy J.
DEAR CATHY: No. Mortgage lenders will rarely agree to remove a co-borrower’s name from a mortgage even when that person no longer lives in the property or makes the mortgage payments.
Purchase Bob Bruss reports online.
But why get the ex-girlfriend’s name off the mortgage? As long as your son pays the mortgage on time, his credit score is not affected by having a co-borrower on the mortgage.
However, if the girlfriend’s name is still on the title to the house, your son should try to get her to sign a quitclaim deed to him renouncing her interest in the house. If he fails to do so, when he eventually wants to sell the house, she might demand half of the profits in return for her signature on the deed.
IF CO-OWNER DOESN’T SIGN LISTING, NO DUTY TO SELL HOME
DEAR BOB: We made a good-faith offer to buy a house. The owner who listed the house for sale accepted our purchase offer. We proceeded with the customary inspections and made plans to move in. Then, about five days before the scheduled closing date, our buyer’s agent told us the seller’s ex-wife refuses to sell. We and our buyer’s agent had no idea there was another owner involved. She never signed the listing. Does the listing agent have any financial obligation to us for our costs incurred? –Mazy W.
DEAR MAZY: Possibly. Any knowledgeable real estate agent, when taking a listing on a property for sale, will have the title status checked to be certain there are no undisclosed owners and/or liens which the seller failed to disclose.
Perhaps the ex-husband thought he could get his ex-wife to agree to the sale. But that is no excuse for the listing agent’s failure to have the title checked for undisclosed owners who might have an ownership interest in the property.
However, you should have been promptly informed of the problem. Your buyer’s agent is partly to blame because surely she should have received a title report on the property and noticed the ex-wife’s name on the title. Please consult your attorney as to possible recourse against the realty agents.
DOES WIDOW GET $250,000 OR $500,000 HOME-SALE TAX EXEMPTION?
DEAR BOB: My husband and I own a house as tenants in common. He died in 2005. Now I would like to sell the house. Am I entitled to the $500,000 exclusion on my capital gains? –Rose S.
DEAR ROSE: No. You would be entitled to the $500,000 principal-residence-sale capital gains tax exclusion only if you sold the house in 2005, the year of your husband’s death.
However, presuming you inherited your husband’s share of the property, you received a new “stepped-up basis” to market value on at least that share as of the date of his death.
Presuming you owned and occupied the principal residence at least 24 of the 60 months before its sale, Internal Revenue Code 121 entitles you to a $250,000 exemption upon its sale. For details, please consult your tax adviser.
The new Robert Bruss special report, “Pros and Cons of Investing in Rental Houses and Condominiums,” is now available for $5 from Robert Bruss, 251 Park Road, Burlingame, Calif., 94010, or by credit card at 1-800-736-1736 or instant delivery at www.BobBruss.com. Questions for this column are welcome at either address.
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