As of 2014, an individual can give up to $14,000 in gifts each year to any number of individuals without being liable for a gift tax. That means if you have three children and you want to give them money, you can give them each $14,000 per year without having to pay any gift tax. A couple can give up to $28,000 per year to any number of individuals without paying federal gift taxes. That means a couple can give $28,000 per year to each of their children without having to pay any gift tax. For example, a father and mother could give a child and their spouse $56,000 every year ($28,000 to two individuals). As of 2014, the lifetime cap on gift tax exemptions is set at $5. 34 million. If, for example, you give $14,000 annually in gifts to multiple individuals, you will not be liable for an annual gift tax, but you will eventually surpass this lifetime limit for gift exemptions and become liable for any additional gifted income over $5. 34 million. Taxed gifts do not count toward this lifetime cap. As of 2014, Connecticut is the only state to levy a state gift tax. [2] X Research source Other states have enacted gift taxes, but most have been repealed in recent years. [3] X Research source These gift tax exemptions are subject to yearly change. Consult your tax preparer to see how to report your gifts on your tax returns.

Creditors do not particularly care who pays the bill. The process of making a direct payment as a third party is no different than that of paying your own mortgage. However, some additional steps will be necessary if you want to remain anonymous. Whoever pays the mortgage receives the tax deduction for mortgage interest. The homeowner will no longer be able to claim deductions for payments that you made, but you will.

Creditors are legally required to send a monthly statement that includes a complete breakdown of money owned, payment history, and the breakdown of principal and interest. [5] X Research source

Most banks now prefer online payments. Simply go to the bank’s website and input your account information to pay the balance of the mortgage. Similarly, you can find the bank’s phone number and pay the bill by phone. Find the bank’s address to mail a check. Send a check or cashier’s check. Mail the check via certified mail to confirm receipt. Make sure that you write down the name and address of the debtor and their account number in the memo section of the check so that the bank knows which mortgage you are paying. With the account number in hand, you can also pay a mortgage in person at the bank. This might be the most comfortable method for those making large payments. [7] X Research source

Alternatively you can hire a title examiner to do the research for you. It will cost you more but save you time and energy. [8] X Research source

To assume someone else’s mortgage you will ideally want to have approximately credit score as the current debtor or perhaps a bit higher. A credit score in the mid 600’s is generally sufficient to be approved for a mortgage. [11] X Research source

Even when there is a due on sale clause, you can still assume a mortgage if: you are assuming your parents’ mortgage, transferring the property to a relative after the death of the borrower, transferring the property between spouses, or transferring it according to the terms of a divorce. [13] X Research source FHA and VA loans are always assumable. If there is a due on sale clause in the mortgage, but the lender is fine with you assuming it, they might still change the terms of the mortgage, possibly increasing the interest rate. [14] X Research source

There is no general rule as to which option will be better, however, because interest rates are currently higher than they were in recent years, it is quite likely that assumable mortgage will have rates much lower that you could currently find. The drawback to assumable mortgages is that often the original borrower will still be liable for the mortgage. If the mortgage is not paid it can affect their credit score. Try to get a written release of liability from the lender and keep it for your records. [15] X Research source