Question for the Money Doctors

Question submitted on Jan 10, 2023.

Question

Several years ago, my pastors helped my husband and I to get into the house right next door to them. Hubby and I have struggled financially for years and our credit is poor.
as a result, the loan for the house is in our pastor's name. We give them the payment each month (we pay $1,000 and they add $400 for the use of the back part of our .75 acre-this is $200 above the expected payment because we want to pay it off sooner) and they submit the payment to Amerititle. The house originally cost $125,000 and the note is down to about $36,000. We are now starting to think about the best way to get the house into our names rather than the pastor's. We had originally planned to apply for a loan to pay off the balance once it got low but with the large amount that I owe in student loans, I am worried about acceptance and/or interest that we would be charged. I also wonder about how that looks and what effect it would have on the property value. Would that be recorded as a sale of the house at this low rate? How would that affect us in the long run? Also, Hubby is 66 years old and looking at retiring at 70. Should we wait until the house is completely paid off and then transfer the title? How does one do that? Suggestions would be greatly appreciated.

Answer

There is a lot going on here.   I suggest you look for a Financial Coach to better improve your financial situation.  There are many organizations who offer financial coaching on a pro bono basis.

Go to your bank or credit union to see if you can refinance the loan into your name and have the pastor transfer title back to you.   You should understand the tax consequences of doing this.

Student loan payments have been suspended since March, 2020, so that should give you some breathing room to catch up.   Also, there may be some student loan forgiveness pending the Supreme Court decision this year.   How much do you owe in student loans?   There are many ways to get loan forgiveness with student loans and there are income based repayment plans.   Go to https://studentaid.gov/ to learn more.

Can you delay retirement to improve your financial situation?

You have many complicated questions that needs some good tax and legal guidance.

For additional information visit //www.360financialliteracy.org/