On Mar 6, 10:10*pm, "hr(bob) "
wrote:
On Mar 6, 6:23*pm, (Una) wrote:





The question is better suited to misc.legal or misc.legal.moderated,
but I'll answer it here. *I have a private mortgage. *The term "Seller
financing" on a house for sale means the seller will consider giving
the buyer a private mortgage. *It can be a good deal for both parties.

You need 2 forms, Mortgage (aka Security Deed) and Promissory Note.
Using FannieMae / Freddie Mac Uniform Instrument (so called FNMA)
versions of these will make it easy for all parties; *a uniform
mortgage is, well, uniform. *You can get the forms an old-fashioned
stationery store, the kind that sells forms! *Or online: *there are
many sources. *I got my forms (FNMA) online from uslegalforms.com .

A mortgage is a mortgage is a mortgage, for legal and tax purposes.
5% is well within bounds of market rate and thus does not qualify as
a gift.

* * * * Una

Thank you Una!!!

You are the only person who responded correctly with the names of
Promissory Note and Mortgage. *I posted my original question after
finishing doing the income taxes for an individual who runs a home
business, owns three homes, and also works outside of the home and a
second semi-retired couple who have a large variety of investments and
some weird expenses.

I was hoping for someone to say promissory note and mortgage, which is
what I thought, but didn't want to prejudice any responses.

To everyone else, thanks for taking the trouble to respond, I am well
aware of the pitfalls and there will be language used to make it clear
what happens in case of default, death on the part of any of the
signatories,etc. *I have the forms and am now tailoring them to our
particular circumstances.

H. R.(Bob) Hofmann- Hide quoted text -

- Show quoted text -


Your much too kind Bob. Many of the answers here were completely
incorrect. Starting with the claim that a private party can't issue a
mortgage to another private party. Or suggesting transfering
title. Or adding you as a co-signer on the loan, etc. None of
those does what you want to do, which is replace the current mortgage
on your daughter/SIL's house with one you give them.

Certainly you can do it and have it recorded properly. I would
suggest that if the interest rate is going to be any significant
amount lower than the prevailing market rate that you check with a tax
advisor. The post suggesting possible IRS issues with below market
loans is correct. As far as the forms, personally, I'd contact a
couple lawyers and ask what their flat fee would be to do this for
you. Should only cost a couple hundred bucks and for me it would be
worth it to have it done right. Alternatively, if you check at the
local hall of records, they can probably point you to the forms/
procedures for recording the new mortgage.

Of course, as others have pointed out, doing this could someday get
messy if their situation changes and they miss payments, get divorced,
etc. As long as you understand the potential problems, there is no
reason you can't do what you want to do. It's done all the time.