Can I sell my house to my husband?

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Can I sell my house to my husband?

I own my house it is currently worth 195k and I
owe 175k. I’m not behind on the payments or
anything. I just can’t qualify for a refinance and
I purchased the home from directly from the
former owner through seller financing at a high
interest rate and at 5 year term. I’m currently a
year and a half in and I don’t want to keep
paying the high interest rate. So I want to sell
to my husband who can qualify for a loan.
Either FHA or traditional. Can I do this?

Asked on June 7, 2017 under Real Estate Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Legally, of course: any mentally competent adult may sell anything to any other mentally competent adult. This includes a spouse: since a spouse may own something in his or her own name solely, spouse 1 can sell or transfer property solely owned by him or her to spouse 2.
Practically, when he applies for the loan, lenders may look at the overall situation, including when you sold the home and the amount you sold it for, and conclude that because this was not an "arms length" transaction and there is  real possibility that he will subsequently sell or otherwise transfer the home back to you, that this is simply a way to get around your own credit issues; they may then decide to not lend which is their right. So while you can do, bear in mind that because this is an atypical transaction and you are selling to a spouse, lenders may scrutinze this differently than if an unrelated 3rd party were buying the home.


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