Quitclaim deed won't end mortgage responsibility
Signing a quitclaim deed will not clear you of the responsibility of making remaining mortgage payments, nor will it stop a lender from foreclosing on the property.
Q. If I sign a quitclaim deed that gives someone else my interest in my home, would I still be liable for making monthly mortgage payments?
A. Yes, you would still have a legal obligation to make the monthly payments - and the lender could still foreclose on the home.
A quitclaim deed merely transfers one person's ownership interest in a property to someone else. It does not transfer the first person's obligation to pay off the underlying loan, nor does it prevent the lender from beginning foreclosure proceedings.
Let's say the worth of your home is $200,000. If you still owe $75,000 on the loan, you would have $125,000 in equity. If you then quitclaimed the house to someone, that person would own the home and the $125,000 in equity, but you would still be legally obligated to make the remaining payments.
You would still owe the bank $75,000, even though you no longer owned the house. And since the property was pledged as collateral for the original loan, the lender could still foreclose and ruin your credit, even though you had since quitclaimed your interest in the property.
Q. I bought a duplex earlier this year. I live in one unit, and I treat the other side as a rental. Will the IRS consider the duplex my primary residence or a rental property?
A. The Internal Revenue Service considers your property both your primary residence and a rental, which means you'll have some extra paperwork to do when you file your next income-tax return.
Assuming your duplex is covered by a single mortgage and property-tax bill, you should deduct interest and taxes on your personal share of the property as itemized deductions on Schedule A of IRS Form 1040, just as you would if you lived in a single-family house.
Report the rental income the other unit generates, as well as a prorated share of the property taxes and all your related rental expenses, on Schedule E of Form 1040. Consult with a professional tax adviser for details.
Q. We have a wood floor in our living room. It's very beautiful, but it squeaks in certain areas when we walk across it. Do you know how to make it stop squeaking?
A. The officials at a Missouri-based trade association called the National Wood Flooring Association (www.woodfloors.org) gives this advice: Most squeaks can usually be fixed by squeezing talcum powder, liquid wax or powdered graphite between the adjacent floor strips where the noise occurs.
You will need to call in an expert if the problem persists. Squeaking that occurs in an area that's more than a foot or two wide sometimes indicates the subfloor has come loose and must be reattached to the floor joists - a job that will cost a lot more than a bottle of talcum powder.
• Our booklet "Fight Your Property Taxes and $ave" provides several simple but effective strategies to appeal your assessment and save hundreds of dollars a year. For a copy, send $4 and a self-addressed, stamped envelope to David Myers/TAX, P.O. Box 2960, Culver City, CA 90231-2960.
© 2015, Cowles Syndicate Inc.