DEAR MR. MYERS: My husband and I are getting divorced. He has a good job and wants to keep our house, so he said that he’ll make all of the future mortgage payments if I agree to sign a quitclaim deed that would give my half-interest in the home to him. This seems OK to me, but what do you think?
ANSWER: I don’t know how much you trust your husband, nor the future of his job that would be needed to make the payments on the house.
For legal purposes, though, the lender of the home that you and your spouse currently share can hold you personally liable for the entire balance of the mortgage if it goes unpaid. You and your soon-to-be ex each signed for the loan, which means that you must pay the entire bill if he cannot pay his share.
Signing a quitclaim deed won’t help: It would simply mean that you would give up all your legal interest in the property, but still be on the hook for its future payments.
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In a worst-case scenario, the quitclaim would cede your half-interest in the home to him, allow him to stop making the monthly payments, and then permit the lender to insist that you continue making regular installments on a house that you no longer own. If the bank must eventually foreclose, it would leave a scar on your credit record that would last for several years.
Your letter states that your husband has a good job, so he should try to refinance the current mortgage in his own name. Doing so would sever your financial ties to both the home and the bank.
Of course, the simplest solution would be to sell. The lender would be paid from the sale proceeds, you wouldn’t have to worry about any future loan payments, and any profit that’s left could be split however your husband and you decide.
REAL ESTATE TRIVIA: A new survey of nearly 5,000 adults conducted by Bank of America found that 74 percent of all first-time buyers say their children had a “major influence” on the type of property they purchased and where it is located.
DEAR MR. MYERS: We have lived in the same quiet community for several years. A younger couple recently moved in across the street, and they both work full-time out of their home. They are both accountants, and the clients who visit them are causing all sorts of parking problems and other headaches. My husband and I don’t want to confront them because we don’t want to create any “bad blood” between us and the new neighbors, but this whole situation is getting out of control. Any suggestions?
ANSWER: Confronting troublesome neighbors is never pleasant, but sometimes it must be done.
Assuming that other people on your block share your concerns, a group of you could make a cordial visit to the young couple and discuss the problems that their home-based business is causing. Perhaps the couple would be willing to make more visits to their clients’ offices or homes, or restrict visits to their own home to specified hours of the day.
If you live in a neighborhood that’s controlled by a homeowners association, the HOA’s rules probably include limits on home-based businesses. Some associations even ban them.
Should your new neighbors refuse to compromise, consider contacting local zoning officials at City Hall. Most cities and counties have ordinances on their books that prohibit people from operating full-time businesses from their home, especially if the enterprise creates problems with traffic, parking or noise.
It’s commendable that you don’t want to create friction between your new neighbors and the rest of the folks who live on your block, but remember – it’s your neighborhood, too.
DEAR MR. MYERS: I was blessed to be married to the most wonderful man in the world for 47 years, but he passed away last spring. Now I am thinking about selling the home that we’ve owned since the 1970s and moving into a small condo or townhome, but my son says that the Internal Revenue Service does not allow tax deductions for people who buy a condo. Is this true?
ANSWER: No. I’m afraid that your son doesn’t know the nation’s tax laws very well.
The IRS allows buyers of a condo or townhome to deduct all their mortgage-interest payments and property taxes just as the buyer of a traditional single-family house could.
Perhaps the confusion here involves the monthly dues that you would pay to the condo’s homeowners association. You could not deduct the cost of those dues while you live there, but would be able to deduct them if you later rent the place to someone else.
Talk to an accountant or other tax professional – not your son – for more details. The nonprofit, seniors-oriented AARP (888-687-2277) helps older people find a local tax pro who charges little or nothing to answer tax-related questions or to complete a basic tax return.
David W. Myers’ column is distributed by Cowles Syndicate Inc.